Since there were no submissions at the UFC on FOX 7 show, the UFC decided to award two bonuses for best KO, as the debuting Yoel Romero also took home an extra paycheck.
Thomson finished Diaz on a sequence that started with headkick that landed flush. Diaz went down but tried to defend himself, but Thomson swarmed him with ground strikes to force the stoppage.
The win marked his first in the octagon since Jan. 2004.
Romero, a 35-year-old Olympic freestyle wrestling silver medalist in the 2000 games, stunned everyone with a flying knee knockout of Clifford Starks in the event's opening round.
Brown's upset win marked a career-best five fight win streak.