Gustafson led by five shots after the third round
FINAL ROUND LEADERBOARD:
GB unless stated
-17 S Gustafson (Swe)
-15 L Davies
-11 A Sanchez (Spa)
Sophie Gustafson held off a charge from Laura Davies to claim her 12th Ladies' European Tour title at the Austrian Open at Fohrenwald-Wiener.
Davies had started the final round six shots behind her Solheim Cup colleague but came close to victory with five birdies in her final seven holes.
But a 67 for 15 under par left her two shots adrift of Gustafson, who had five birdies and four bogeys in her 71.
It is the Swede's first win since she won three times in the 2003 season.
Spain's Ana Belen Sanchez, a member of the winning 2003 Solheim Cup team, closed with a 69 and was in third place on 11 under par.
But England's Lisa Hall, who started the day tied for third with Davies, stumbled to a 78 and was joint 13th on four under par.
It was a bit of a shame that I came second again, but it's still been a great run
For Davies, who won the SAS Masters in Norway last month, it was a sixth second place in Europe this summer and means she has bolstered her hopes of clinching a record seventh New Star Order of Merit title.
She is ahead of Gwladys Nocera and the French golfer is in California preparing for this week's LPGA pre-qualifying school.
But Nocera could catch her if she wins the Ladies' English Open and the Dubai Ladies' Masters next month.
Davies misses both tournaments as she is taking part in a charity walk along the Great Wall of China.
"It was a bit of a shame that I came second again, but it's still been a great run in Europe this year and it was great to get back into the winner's circle (for the first time in over two years) in Norway," said Davies.
"I've really enjoyed playing in Europe so much this summer - being in contention every week is a good feeling and great for the confidence."