Shcherbakova, 15, made up a 10-point deficit from the short program to beat Alena Kostornaia, after Medvedeva withdrew from the competition.
The defending champion was in imperious form, landing three quad jumps, and had only one minor error as she retained her national title in Krasnoyarsk.
Alexandra Trusova put in a free skate with a number of mistakes but still managed to hold on to third place.
However, one name missing was Evgenia Medvedeva, who battled through multiple issues to finish fifth in the short program.
The 20-year-old Toronto-based skater withdrew from the competition before the free skate, reportedly due to continuing problems with her skating boots which she had been struggling with all week.
It was later announced that Medvedeva would miss the rest of the season competitively to work on improving her technical ability.
It was nearly perfection from Shcherbakova, who won her first national title last year aged just 14.
The now-15-year-old included three quadruple jumps in her routine: two quad Lutzes (one as part of her opening quad Lutz, triple toeloop combination) and a quad flip.
Her only error of the entire skate came on her quadruple flip, which she had to step out of. But she made up for that with a beautifully-executed second quad Lutz, which earned her an incredible 4.8 grade of execution score.
She also found time to make a costume change part of the way through her skate.
The routine earned her 181.94 points, of which over 108 came for her technical elements, for a total of 261.87 points.
Kostornaia, who had an advantage of nearly 10 points over Shcherbakova after the short program, has one disadvantage on her younger rival: she has no quadruple jumps.
But the 16-year-old is able to execute the triple Axel, showing it off twice in her routine including in her opening triple Axel, double toeloop combination.
Mistakes on a later double Axel and triple toeloop might have cost her, however.
Skating after Shcherbakova did, she knew exactly what score she had to achieve – around 172 points – to claim the crown.
Ultimately, her performance wasn't enough, earning 169.97 points for a total of 259.83, 2.04 points behind Shcherbakova.
It was a far more mixed routine for the night's final skater, Alexandra Trusova.
Like Shcherbakova, the 15-year-old is able to pull off quadruple jumps. But Trusova got off to a rough start and with that went her hopes of winning.
She fell on her opening quadruple flip, before making the same mistake on her quad Lutz.
Her third jump – listed as a quadruple toeloop – was popped, as she only managed two rotations, and although she showed fight in the second half of her routine, even successfully completing the quad toe in combination, the mistakes were too much to overcome.
Trusova had to be consoled by coach Tutberidze as she came off the ice in tears, with her confidence clearly shaken.
With the crowd chanting her name in encouragement, she made it to the kiss-and-cry where her total score of 226.34 was confirmed, enough to win bronze.
In Krasnoyarsk, the 20-year-old suffered problems with her skating boots, and somehow managed to put in a solid short program with her faulty boots to finish fifth.
But with more jumps required in the free skate, she decided not to risk potential injury and withdrew from the competition, adding that she would skate in the exhibition gala without jumping.
She will now take the rest of the season off competitively.
Speaking on Russian TV, Medvedeva also announced her new free skate would be set to music from the Cirque du Soleil production Alegría.