Dulko is no stranger to Wimbledon upsets having beaten the great Martina Navratilova as a 19-year-old in 2004 and she showed little stage fright as she sealed the opening set in 35 minutes with a crunching forehand winner.
Sharapova's frustration grew in the second as Dulko raced to a 3-0 lead but the Argentine suffered a temporary meltdown and her opponent raced back into contention with a run of seven straight games.
The two exchanged breaks in a tortuous decider which saw Sharapova punch the air after claiming every key point and Dulko somehow recover the composure she lost so spectacularly in the middle of the second set.
The Argentine stayed calm to seal victory on her nerve-wracking fifth match point and consign the 2004 champion to her second straight second-round defeat at SW19.
Dulko now faces a third-round contest against Russian 10th seed Nadia Petrova.
"It's a great day for me I feel really happy," said the 24-year-old from Buenos Aires.
"I didn't play well in that second set but in the third I kept fighting. I was really nervous at the end, I wanted to finish there and not go 5-all, she's very competitive but I am so happy.
"The crowd were great, I hope they will be there for the next match."