Spanish teenager Alcaraz cruised past Russian Daniil Medvedev in Sunday’s final to retake top spot from Novak Djokovic who was missing Indian Wells due to being unvaccinated against Covid.
American Taylor Fritz dropped five spots to world number 10 after his title defence ended in the quarter-finals.
Nadal, who has been out injured since a second-round exit at the Australian Open, fell to 13th place.
The 22-time Grand Slam champion had previously been inside the top 10 since April 2005.
ATP top 20
1. Carlos Alcaraz (ESP) 7,420 pts (+1)
2. Novak Djokovic (SRB) 7,160 (-1)
3. Stefanos Tsitsipas (GRE) 5,770
4. Casper Ruud (NOR) 5,560
5. Daniil Medvedev 4,330 (+1)
6. Felix Auger-Aliassime (CAN) 3,415 (+4)
7. Andrey Rublev 3,390
8. Holger Rune (DEN) 3,325
9. Hubert Hurkacz (POL) 3,065 (+2)
10. Taylor Fritz (USA) 2,975 (-5)
11. Jannik Sinner (ITA) 2,925 (+2)
12. Cameron Norrie (GBR) 2,815
13. Rafael Nadal (ESP) 2,715 (-4)
14. Frances Tiafoe (USA) 2,710 (+2)
15. Alexander Zverev (GER) 2,580 (-1)
16. Karen Khachanov 2,505 (-1)
17. Pablo Carreno Busta (ESP) 2,230
18. Alex de Minaur (AUS) 2,085
19. Tommy Paul (USA) 2,045
20. Borna Coric (CRO) 1,905
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