Rublev had to hold his nerve in a final set tie-breaker on day two of the end-of-season tournament to edge out his fellow Russian by a 6-7 (7) 6-3 7-6 (7) score in Turin.
After his victory, world number seven Rublev appeared to send a message regarding the ongoing war in Ukraine - following Russia's invasion of the country in February - by writing the word "peace" three times on one of the on-court cameras followed by "all we need".
The packed crowd were treated to two hours and 31 minutes of exceptional tennis but it was 2020 ATP Finals winner Medvedev who claimed the first set.
Rublev would not be deterred though and hit 25 winners across the second and third sets to secure an important victory in the battle to progress into the semi-finals.
Earlier in the day Britain's Neal Skupski teamed up with Wesley Koolhof to down Australian duo Nick Kyrgios and Thanasi Kokkinakis 6-7 (3) 6-4 10-5 in Green Group of the doubles competition.