The match ended in a 1-1 draw after extra time in Yamoussoukro before Ivory Coast emerged victorious in the shootout against the reigning champions.
Franck Kessie, who had earlier scored from the spot to equalize four minutes from the end of normal time, converted the winning penalty to seal an impressive comeback for the hosts.
This victory marked a major turnaround for Ivory Coast, who had struggled in the group stage with two defeats, entering the round of 16 as best losers.
Senegal had taken an early lead through Habib Diallo’s goal in the fourth minute, capitalizing on a cross from Sadio Mane.
However, Ivory Coast fought back, eventually forcing the match into extra time and then prevailing in the tense penalty shootout.
Ivory Coast’s next clash will be in the quarter-final match on Saturday, where they will face the winner of the last-16 tie between Mali and Burkina Faso, scheduled to take place in Korhogo on Tuesday.