The world No 1, who earlier in the day was handed a testing draw for his title defence at the All England Club, went down 6-4 6-3 to the 18-year-old at The Boodles exhibition event at Stoke Park.
Djokovic had beaten Richard Gasquet in his first grass-court match of the year on Thursday but he struggled with Zverev’s serve throughout.
The Serb said afterwards he had been “very impressed” by his opponent, who has been widely tipped as a future star.
Djokovic said: “I know how good he is. He has a very good chance to at least get into the second week (at Wimbledon).
“I’m sure he’s excited to be where he is at the moment. He has a great future ahead of him.”
Rafael Nadal is also due to play at the Buckinghamshire venue on Friday as he puts the finishing touches to his Wimbledon preparations against Robin Haase.