Novak Djokovic overcame a fierce challenge from Juan Martin del Potro Sunday to defend his Shanghai Masters title with a 6-1, 3-6, 7-6 (7/3) victory, improving his phenomenal winning streak in China to 20 matches.

The Serbian top seed looked set to wrap up the final in double-quick time after a one-sided first set -- but the Argentine, who conquered Rafael Nadal in the semi-finals, hit back hard to take the match into a third set tie-break.

Djokovic held his nerve in the shoot-out to win a gripping contest lasting more than two-and-a-half hours for his fifth title of the season.

The victory keeps alive his slim chances of overtaking Nadal in the battle for the year-end number one ranking.

"It was a great experience again in Shanghai with a thrilling performance from both my opponent tonight and myself," said Djokovic, who struck 47 winners in total and was particularly impressive at the net, winning 18 of 19 points.

"I think the tournament had a fantastic final. I'm just very glad to go out as a winner from the court tonight from such a close match."

"I think either one of us could really take the title. I just managed to hold my emotions and I managed to believe in the victory enough in the end to play the right shots at the right time," added the Serb, who also won last week's China Open in Beijing.

Del Potro came into the final against the top seed brimming with confidence after his semi-final demolition of Nadal, but was immediately on the back foot in breezy conditions at the Qizhong Tennis Center.

The 26-year-old Serb established an iron grip on the first set with a double break, dictating the play and not allowing the sixth seed to produce the thundering groundstrokes that dispatched Nadal.

The giant Del Potro avoided an embarrassing "bagel" to loud cheers, but could not prevent Djokovic, playing with controlled aggression, from sealing the set.

But in the second set the Argentine, the winner of last week's Japan Open, rediscovered the kind of form that he found to see off Nadal, breaking at his first opportunity in a bizarre game in which his Serbian opponent appeared to have trouble keeping his balance.

Djokovic engineered a golden opportunity to hit back, earning three break points in the seventh game, but former US Open champion Del Potro upped his game to hold, going on to level the match.

Both players had chances to break in the third set, but as the match edged towards its climax it was Del Potro who was facing more pressure on his serve. He was forced to dig deep to save two match points in the 10th game.

The Serb opened a 4-2 lead in the tie-break, going on to seal victory with a backhand winner down the line.

"The match was really close and I think Nole played unbelievable points in the tie-break," said Del Potro, who added that poor serving was partly to blame for his slow start.

"I was lucky in the second (set) because I broke very early," he added. "The crowd helped me because they want to watch a longer match, for sure... I think I played another really good match. But today I lost."

Djokovic, displaced this week by Nadal as world number one, now has 15 Masters titles.

Del Potro, 25, has qualified for the elite season-ending World Tour Finals in London, featuring the season's top eight players.

Other confirmed qualifiers are Nadal, Djokovic and Spain's David Ferrer.