The 27-year-old recorded a 3-6 6-3 6-3 victory over the world number one, but has admitted that he is "really happy" just to be competing in the end-of-year tournament courtesy of Andy Murray's departure.
"There were a lot of ups and downs for both Nole and me," said Tipsarevic. "I started the season at 49th and if someone told me this was how I'd finish 2011 I would have taken it in a heartbeat.
"I'm really happy to be in London, it's a great event and a great crowd and I hope I can be here next year."
Djokovic needs David Ferrer to defeat Tomas Berdych in their clash this evening in order to secure a spot in the semi-finals of the competition.