Ricciardo attacked the frontrunners after using a safety vehicle period to pit for fresh tyres.
Team-mate Max Verstappen stopped at the same time - but threw away his chances with two errors caused by over-optimistic driving.
But the Australian began the race by calmly moving up the grid and taking an advantage from the event's only safety auto period to pass Valtteri Bottas on the 45th lap to win his career sixth race by 9.1 seconds over the Finn.
How did Ricciardo do it?Bottas was able to make light work of Raikkonen with a slick pass around the outside of Turn 1, with Vettel soon following through, albeit still unable to get back ahead of the Mercedes driver.
But that saw Bottas take the lead from Vettel as he rejoined the race after his pit stop.
But the safety auto threw in a curve ball and Red Bull grabbed their chance.
Red bull under the safety vehicle to quickly put on the cars their riders fresh sets of tyres that provided them an advantage over the other favorites.More news: Blizzard warnings and watches posted for much of Nebraska
Ricciardo claimed his sixth career F1 win.
Hamilton and Vettel, who were expected to be fighting it out for the world championship this term, were left in Ricciardo's wake.
Driver of the day: Again, it's hard to go past Ricciardo.
"Sometimes you've just got to lick the stamp and send it", he said in classic Ricciardo fashion.
"I don't seem to win boring races!", an emotional Ricciardo said on the podium. "They are all pretty fun but that was unexpected". In the end, the top six all opted to change onto the durable medium tyre at the first stop but only Red Bull elected to switch onto the medium compound when the Safety Car came out. Bottas and Vettel had already passed the pit entry when the safety vehicle was deployed so could not have pitted.
"I was in no-man's land today", Hamilton said. He apologised to Vettel afterwards. Carlos Sainz was ninth, with Kevin Magnussen taking a single point for Haas. On the catwalk the company pilot "Red bull" was two Finn, Bottas and Raikkonen.
A frustrated Hamilton was passed by Verstappen with eight laps to go but the Red Bull driver did not manage to pull out enough of a lead over the Mercedes to keep the place once his penalty was applied.
Driver of the dayNo contest this - Ricciardo was stunning in the closing laps.More news: Tottenham Hotspur v Manchester City — Big Match Focus
Before the start of the 15th edition of the Chinese Grand Prix, you could be forgiven for thinking the Red Bulls weren't in Shanghai for a win, let alone a podium finish.
Further down the field, there was an unfortunate moment for Toro Rosso, as Pierre Gasly and Brendon Hartley tangled at the hairpin at the back of the circuit, damaging the Frenchman's front wing and sending the New Zealander into a spin.
"They're all sweet but until I got Valtteri that I wasn & rsquo; t even, to tell the truth". It was insane, a lot of fun.
"24 hours ago I thought we may be starting at the back of the grid". The team were rewarded for getting out in qualy but this is the best reward.
Lewis Hamilton, the four-time and defending champion, finished fifth but was promoted to fourth ahead of Max Verstappen.
"We have been underperforming". "I'm thankful for a couple of incidents that kept us kind of in the battle".
Verstappen was handed a ten-second post-race time penalty but all eyes were on the charging Ricciardo.
"I could see him struggling on the tyres and tried to brake late into the corner and locked the rears a bit and hit him, so that was of course my fault", the 20-year-old said. I had no intention of resisting, there was no point in doing so they were too fast.More news: Bayern Munich confirm new coach to succeed Heynckes
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