Djokovic – who won Wimbledon last month – had been looking to continue his rich vein of form in Toronto.
However, he ran into an inspired Tsitsipas, who knocked out the Serbian in three sets.
Tsitsipas’ shock win means he is through to the last eight of a Masters 1000 competition for the first time in his career.
He will now face Zverev, who will be playing in his fifth Masters last-eight tie this season.
But Djokovic bemoaned his struggles from the baseline and return of serve for his defeat.
He said: “I just played not that great, especially from the baseline. I didn’t return well.
“So all in all, it wasn’t that great of a match.
“You have those days, and better earlier than later in this series.”
And Djokovic has predicted good things for Tsitsipas, who is hoping to break into the top 20 of the ATP rankings.
“He’s definitely one of the leaders of Next Gen without a doubt, especially this season. He’s had some terrific results and terrific wins,” Djokovic added.
“He’s showing a lot of commitment, a lot of discipline. You know, he’s putting in the hours in the gym, on the tennis court, and it’s paying off.
“I mean, he’s very talented. He was the best junior in the world.
“If he keeps on going this way, he’s got a good future.”