Nadal, whose last stint at the top ended a year ago on November 4, 2018, withdrew from his semi-final against Shapovalov in Paris with an abdominal muscle strain.
Djokovic slips down the rankings because he loses the points that he won a year ago in London when Nadal was absent. The 2019 battle between Nadal, winner of the French and US Opens, and Djokovic who triumphed in Australia and Wimbledon, is set to go to the wire as either could still finish the year at number one.
If the Spaniard does not play or fails to win a round-robin match at the World Tour Finals, Djokovic must claim two group-stage victories and make the final to pass him.
Djokovic would also be sure of the year-end top ranking should he win the tournament and Nadal does not reach the semis.
Nadal first reached number one on August 18, 2008 when he was just 22. He has spent 197 weeks at the top, the sixth highest in ATP history behind Roger Federer (310), Pete Sampras (286), Djokovic (275), Ivan Lendl (270) and Jimmy Connors (268).
Gael Monfils returns to the top 10 for the first time since February 2017 after reaching the semi-finals in Paris while 20-year-old Shapovalov climbs 13 places to a career-high 15.
ATP rankings as of November 4
1. Rafael Nadal (ESP) 9,585 pts (+1)
2. Novak Djokovic (SRB) 8,945 (-1)
3. Roger Federer (SUI) 6,190
4. Daniil Medvedev (RUS) 5,705
5. Dominic Thiem (AUT) 5,025
6. Stefanos Tsitsipas (GRE) 4,000 (+1)
7. Alexander Zverev (GER) 2,945 (-1)
8. Matteo Berrettini (ITA) 2,670 (+1)
9. Roberto Bautista (ESP) 2,540 (+1)
10. Gaël Monfils (FRA) 2,530 (+3)
11. David Goffin (BEL) 2,335 (+3)
12. Fabio Fognini (ITA) 2,290
13. Kei Nishikori (JPN) 2,180 (-2)
14. Diego Schwartzman (ARG) 2,125 (+1)
15. Denis Shapovalov (CAN) 2,050 (+13)
16. Stan Wawrinka (SUI) 2,000
17. Karen Khachanov (RUS) 1,840 (-9)
18. Alex De Minaur (AUS) 1,775
19. John Isner (USA) 1,770 (-2)
20. Grigor Dimitrov (BUL) 1,747 (+7).