Nadal stunned by Zeballos in VTR Open final
Nadal had looked relatively untroubled en route to the final and was the overwhelming favourite to end a positive return to competitive tennis after seven months out with the title at Vina del Mar.
But Zeballos was clearly not overawed by facing the 11-time grand slam champion and defied the odds to triumph 6-7 (2/7) 7-6 (8/6) 6-4 for his first ATP Tour crown.
"It's a dream for me," Zeballos told the ATP Tour's official website.
"To be able to play a final against Nadal was already good enough for me. It's a moment that will stay in my memory for the rest of my life."
Zeballos did not progress beyond the second round in any of the tour-level events he competed in last year, but had already beaten three seeds en route to the showpiece encounter.
He saved his best performance of the week for Nadal - who before this week, had not played a competitive match since suffering a shock second-round defeat to Lukas Rosol at Wimbledon last year due to injury and a stomach virus, an illness which ruled him out of last month's Australian Open.
The Spaniard saved two break points on his opening service game and looked to be on course for victory after wrapping up the first set on a tie-break.
Yet even then, the world number 73 refused to buckle and he duly levelled proceedings after another tight tiebreak.
There had been no breaks of serve in the opening two sets, but Nadal changed that when he won the opening game before immediately relinquishing his advantage.
At 5-4 ahead, Zeballos made his move and charged into a 0-40 lead on Nadal's serve before converting his first match point and sealing victory after two hours and 46 minutes.
"I've worked really hard because I really wanted to be at this level," Zeballos added.
"For some months, I've been playing at a high level and I think I'm at the best moment of my career. I'm very strong physically and psychologically."
Nadal characteristically chose to take the positives from the defeat, despite missing out on the chance to collect his 37th clay-court title.
Yet the former world number one hopes he can go from strength to strength following a successful comeback in Vina del Mar.
"It was a great tournament for me," he said. "If we take everything, it was positive. It's true I wanted to win the final but it wasn't possible. He made things better than me and I didn't play my best match.
"I just need to keep working, practicing with hope, motivation and the right attitude to have better sensations every week. I hope it's the beginning of a lot of good things for me."