Salido dominated throughout and put Cruz away with a right hand to the chin and left to the body during the seventh after a heavy exchange of power blows during their bout in Las Vegas.
Cruz went down to the canvas face first with referee Kenny Bayliss then stopping the fight to push Salido's record to 40-12-2, with 28 KOs while Cruz fell to 20-3-1.
"I went into the corner and he hit me with a good shot," Cruz said. "I thought the fight was close up until then. It was going back and forth."
The reality was Cruz, wearing rainbow trunks to promote gay rights, was never really in the fight, landing just the occasional blow and clearly being stung by the ferocity of Salido's combinations and body shots.
The Mexican, however, was magnanimous in his praise for the outclassed Cruz.
"Cruz is strong and fast, and I had to fight with intelligence and put a lot of pressure on him," Salido said.
"This is the biggest moment of my life. My career has been like a roller coaster.
"I've had my ups and downs, but its great to be back on top. It's a very big win."
The WBO title was vacant after Miguel Angel Garcia was stripped of the belt when he failed to make weight for his first defence against former champion Juan Manuel Lopez in August.
Garcia had won the belt from Salido in January.
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