The 15th seeded Tsonga looked dead and buried down 2-5 in the final set before 18-year-old Shapovalov faltered in only his second five-setter and the experienced Frenchman seized the initiative.
Tsonga, 32, stormed into the third round after a 3-6, 6- 3, 1-6, 7-6 (7/4), 7-5 win in 3hr 37min on Margaret Court Arena and will now face either Australian 17th seed Nick Kyrgios or Serbia's Viktor Troicki.
It ended his three-match losing run in five-setters, but lifted his career record to 16-10 and reversed his loss to Shapovalov in straight sets in the second round at last year's US Open.
"But the most important (thing) for me, it's to fight, give my best on court until the last point. That's what I did today.
"I think he deserved to win also today, but I was also courageous and I did my job at the end. I played well. I think I deserve it, too."
It extended Tsonga's record at his best-performed Australian Open Grand Slam to 36-10 after he was runner-up to Novak Djokovic in the 2008 final.
==============
Shapovalov said he would learn from the experience of losing after holding a winning position.
"There's always nerves in a tennis match. I wasn't thinking about it much," he said.
"I just didn't play a good game on my serve (for the match). Then he picked up his level.
"This was my longest match in the heat. Physically, I feel good. My body is getting a little bit tight on me now.
"Yeah, nothing too bad there. I mean, I'm just going to learn from it and keep going."
Shapovalov quickly jumped out of the blocks, breaking misfiring Tsonga in the fourth game on the way to taking the opening set in 34 minutes.
But the Canadian left-hander hit back, taking the third set with some sensational shot-making, including a running backhand winner on break point and then breaking again in the sixth game.
Tsonga stayed alive and took the match into a fifth set decider with a resolute tiebreaker.
Shapovalov began the final set strongly, breaking Tsonga in the second game and then holding off break points in the following game to lead 3-0.
But Tsonga would not yield and broke Shapovalov as he attempted to serve out the match with a cross court backhand.
Disclaimer: No Business Standard Journalist was involved in creation of this content
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