Shapovalov got a vital service break early in the fifth set and held on to the first round win.
Sinner had beaten fellow Italian Stefano Travaglia 7-6 (4), 6-4 in a two-hour final at the Great Ocean Road Open tuneup tournament the previous day. No. 11-seeded, 21-year-old Shapovalov had opted for a weekend rest.
After taking the loss against Shapovalov, Sinner was circumspect.
"I don't think it hurt me, to be honest," he said of his hectic week. "Obviously, I started to feel a bit tired after, but I think I can learn many things from that. I'm already looking forward to playing the next tournament with the right mentality."
And then there's the long-term benefit of his time this month in Australia with 20-time major winner Rafael Nadal.
"It's a big, big lesson," he said. "The reason why we came here was to practice with Rafa for two weeks, because I think he can give me many things about how to stay on court with the right mentality.
"Even today it's, for me, mentally tough losing here in the fifth, but it's going to be a lesson."
Shapovalov, at 21 and in the relatively rare position of being the older guy on court, admitted his experience proved to be the difference.
"I was able to kind of rest the last couple of days, and he's had to play some difficult, very difficult matches — he played yesterday literally the final," Shapovalov said. "It's definitely never easy before a Grand Slam, but for sure it was in my head and definitely gave me a little bit of confidence. You know, I did feel like I was probably the fresher guy on the court."
That situation will be reversed in the second round when he meets veteran Australian qualifier Bernard Tomic, who got an easier ride through when Yuichi Sugita retired because of injury while down a break in the third set.
