On his first set point, the Canadian mishit a return that Nadal lifted long, and Shapovalov raised his arms to roars from his thousands of fans.
Shapovalov also dealt an effective 1-2 punch while returning, pushing Nadal to one corner before striking a one-handed backhand or forehand up the line.
But this time it was Shapovalov's turn to fight back, and he won seven of the tie-break's final eight points to earn the biggest win of his life.
After the ball sped past Nadal, Shapovalov tossed his racquet and fell to the court, covering his eyes in disbelief.
The crowd's cheers soaked their new home favourite and, after he shook hands with Nadal, Shapovalov finished his celebration by saying thanks.
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