Another loss would have made it impossible for him to reach the semi-finals for the 15th time in 16 appearances at the tournament.
First up on court, it was Kei Nishikori, who took on Kevin Anderson for a third tournament in a row and it was the big man from South Africa, who took some sweet revenge of his defeat in Paris, with a scintillating 6-0, 6-1 win, to seal his second consecutive victory at the Nitto ATP Finals.
Yet at 6-0 5-0, and with less than an hour on the clock, the 28-year-old finally managed to string four serves together to get on the scoreboard and avoid the dreaded "double bagel".
"No match is easy here and it's not something I'm used to, losing and then coming back and playing again, but it's a great challenge and I'm happy with my attitude and how I played".
The same can be said for Thiem, who struggled to land balls in play in a disappointing defeat to Federer, and the Austrian described his display as "not really acceptable". Today he had obviously a good game for him. "That's okay. If I don't pass, I don't pass, and I deserve not to pass. Alexander Zverev fumes at major issue after Novak Djokovic loss Novak Djokovic reveals true thoughts of new ATP Cup - full format "Important for me is to play a good last match here in the round-robin, try to beat Kevin". Sometimes they ask me, you know, "Asia wants you to play at night".
Having slumped to a shock defeat by Kei Nishikori in the group opener, another defeat for Federer would have meant he would not advance from his group.
"I'll do the same tomorrow because it worked", Federer said of deciding not to practice on Monday.
He certainly looked back in the groove, making only 11 unforced errors, compared to the 34 against Nishikori, and surrendering just six points on serve.
Thiem saved a break point in the opening game but at 1-1 he sent a forehand long to give Federer the advantage he never really looked like relinquishing. He also rarely made any impression with his signature weapon - the one-handed backhand.
Anderson said: 'It's one of the best matches I've ever played.