The Spaniard, preparing to defend his Wimbledon title this month, went down 6-7, 6-4, 6-1 when the exertions of winning a record-equalling sixth French Open crown last Sunday caught up with him.
Tsonga will face British wildcard James Ward who continued a memorable week with two wins in one day, defeating Sam Querrey in a match held over from Thursday night and then seeing off Frenchman Adrian Mannarino.
Nadal does not normally put up the white flag but he played the third set against Tsonga as if he already had one foot on the plane home to Mallorca.
Minutes after walking off court he confirmed he would head home for some golf and fishing before returning with "high motivation" to Wimbledon.
"Probably after losing the second set, mentally I lost my concentration," the 25-year-old said.
"The negative thing is I lost; the positive thing is I have a few days off and can stop a little bit mentally. I can be a little bit more relaxed, because every day I play with pressure.
"That's what happened for me the last four months every day."
Tsonga, the world No 19, was in inspired form on Centre Court, with the match eventually getting into full swing after a rain delay when just two points had been played. Despite the court being covered, Nadal remained on his chair for several minutes during the break, signing autographs before returning to the locker room.
Nadal looked a shadow of his former self when the pair reappeared for the remainder of the match, while his opponent impressed in every aspect of the game, serving 25 aces and delighting the crowd with acrobatic play near the net.
Tsonga had his chances to win the first set, but the French Open champion recovered from break-point down in the sixth game and went on to win the last five points of the tie-breaker.
Nadal was making uncharacteristic errors from the baseline and when Tsonga broke twice early in the third set - the first time after his opponent missed a critical forehand volley at the net on game point - the Spaniard's body language suggested the match was all but over.
Tsonga dominated the remainder of the match, sealing victory with a brutal forehand winner down the line.
The Frenchman was clearly delighted and, with a beaming smile, declared aftewards: "The victory means a lot, of course, because he's the best player in the world, and I'm just happy."The first time I entered the top 100 it was here, and to win against the world number one...
"To beat Rafa I had to play my best and I just played great. It was just amazing, the atmosphere, and I feel good here so I just hope I play well in the next round. I just tried to stay focused in the match and I did it."