Isner eventually prevailed 7-6 (3) 6-7 (1) 6-3 across two hours and 15 minutes, for a long overdue win in Auckland.
The World No 20 had fallen at the first hurdle in his two previous ASB Classic appearances, and was also coming off a difficult stint at the ATP Cup, where he lost to Casper Ruud, Daniil Medvedev and Fabio Fognini.
"Last week was tough for me and I had five or six days to think about those losses, which isn't really much fun," said Isner. "But I put last week behind and the freshest memory I have is winning and playing a good third set [today]."
Though Isner is in the twilight of his career, he's been remarkably consistent.
He is one of just three active players who have won 30 or more matches over the last 10 seasons (the others are Novak Djokovic and Rafa Nadal) and was ranked inside the top 20 every year of the last decade.
Games went with serve in the first set, though Isner had to defend two break opportunities.
But a tiebreak seemed inevitable, though there was a six-minute delay ahead of the breaker, as a female spectator was attended to by medical staff in the Robinson Stand.
Sandgren made a poor start to the breaker, with a double fault and never recovered, as Isner played a delicate half volley to convert his first set point.
Isner touched perfection in the second set, only losing two points when his first serve landed and hitting nine aces.
But then he unravelled in the tie breaker, to send the match to a decider.
The 34-year-old seemed to shift gears at that point, and achieved the first service break at 2-2 in the third, before another in the tenth game to seal the match.
Isner is known for his serving, but managed some good returns and well placed ground strokes to pressure the defending champion.
"It's a good sign," admitted Isner. "If I was going to win that match 7-6 in the third to be honest it would be a relief but I wouldn't be feeling that good about my game.
"I played better in that third set and I am looking forward to getting out there on Thursday and hopefully my footwork is a bit sharper and a bit more crisp and we will see if that can lead to a good result."