The 27-year-old from Austria retired during the opening set of his first match at the Mallorca Open grass-court tuneup tournament this week, citing a wrist injury.
The fourth-seeded Austrian was beaten 4-6, 5-7, 6-3, 6-4, 6-4 by 68th-ranked Pablo Andujar in the first round.
Thiem returned to action at the Madrid Open after taking a break to recharge ahead of the French Open later this month.
The World No. 6 earned 11 break points and broke serve on three occasions to snap a four-match losing streak against Thiem.
Thiem was able to break the tall American on his first chance in the second set and then once more in the third, defeating Isner 3-6, 6-3, 6-4.
The fourth-ranked Austrian was coming off early round losses in Doha and Dubai and felt like he needed a break.
The No. 18-seeded Dimitrov was down a break in each of the first two sets but rallied to keep up the pressure on the current US Open champion.
Thiem will face Grigor Dimitrov for a spot in the quarterfinals.
Thiem has eased through the second round of the Australian Open with a 6-4, 6-0, 6-2 win over Donimik Koepfer;
No. 4 Daniil Medvedev became the first player to defeat each of the men ranked 1-3 in the season-ending championship.
Thiem ended Djokovic’s bid for a record-tying sixth ATP Finals trophy, while Medvedev prevented Nadal from continuing to pursue the most significant title the 20-time major champ hasn’t won.
Thiem could have closed things more than an hour earlier, but he frittered away four match points in the second-set tiebreaker, including one by double-faulting.
Thiem now leads the Group London 2020 2-0.
The US Open champion beat the 20-time Grand Slam champion in straight sets on Tuesday for a second win at the ATP Finals.
The Austrian tennis player, who is ranked No. 3 in the world, won 7-6(5), 4-6, 6-3 against the world No. 6.
Rafael Nadal and Dominic Thiem can set up yet another French Open meeting with victories on Tuesday, only this time they would face each other in the semifinals instead of the final
Dominic Thiem outperforms Casper Ruud in straight sets 6-4, 6-3, 6-1 in the third round under the new roof on Court Philippe Chatrier.
Simona Halep and Amanda Anisimova will play each other at Court Philippe Chatrier in a third-round rematch of their French Open quarterfinal of a year ago. Anisimova, then just 17, won that one to reach her first Grand Slam semifinal.
The third-seeded Austrian won his first major tournament at Flushing Meadows two weeks ago and is among the favorites again at Roland Garros after losing the past two finals to Rafael Nadal.
Thiem defeated 21st seed de Minaur 6-1, 6-2, 6-4 to become the first Austrian ever to reach the last four at the Flushing Meadows.
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