The 24-year-old made beating the 17-time grand slam champion look comfortable as he progressed into the semifinals of the tournament.
Medvedev has now won three of his last four meetings against Djokovic, who can still qualify for the knockout stages if he beats Alexander Zverev in his next match.
The Serb simply made too many unforced errors — 24 in total — and was matched in every department by his opponent who failed to contain his smile after finishing the job.
“I like to play Novak (Djokovic), first of all because he is one of the greatest champions in history,” Medvedev said after the match.
“When I was 8 years old, I was already watching him on TV winning grand slams. He was still young. It is always a dream come true to play against him.
“Of course, (I am) really happy to beat him. I was serving good and playing safe enough in the most important moments. That is why I got the win.”
Djokovic hopes alive
Djokovic had dictated the early exchanges but it was Medvedev who broke first in the opening set after a mammoth game of over 11 minutes.
It proved to be the turning point in the match with the Russian going on to win seven consecutive games.
The hill was simply too steep for Djokovic to recover and he was facing a man in inspirational form.
“To be completely honest, I am sure he didn’t play his best today. But still, it happens for everybody,” Medvedev added.
“I always say the Big Three are the champions because it happens less for them than for other players. It is still tough to beat them, even on their bad days so I am really happy about the win. I am feeling good (and) confident right now.”
It’s a very different story from last year, when Medvedev failed to win any of his group stage matches at the season-ending spectacle.
Medvedev will face either Rafael Nadal or Stefanos Tsitsipas in the semifinals, with the pair going head to head on Thursday.
Earlier on Wednesday, Zverev kept his hopes in the tournament alive by beating Diego Schwartzman in three sets — 6-3 4-6 6-3.
The 2018 champion now faces Djokovic in his final round-robin match on Friday, with the winner progressing to the next round.
“That’s probably the most difficult match-up I could have, playing Novak,” Zverev said after his victory.
“I said from the beginning of the week in every match I’m going to improve. I needed to get back into the rhythm. I went in with the mindset that I had to win and I will do that again on Friday.”