Slovak star wins by 0.18s from Shiffrin who made a successful return from 300 days off the World Cup circuit with Katharina Liensberger third.
That made it four consecutive slalom triumphs for the Slovak who claimed her second win in Levi to make the perfect start to the defence of her slalom World Cup title.
Double Olympic champion Shiffrin, making her long-awaited World Cup return, was just 0.18s behind in second, with Austria's Katharina Liensberger in third 0.57s off the pace.
Those three were well clear of the rest with Switzerland's Wendy Holdener fourth at 1.35s.
"It wasn't easy because it started snowing and I thought the course would be destroyed. But I did it and I'm really happy because last year I went out." - Petra Vlhova to FIS Alpine
The first slalom of the season was missing the whole of the Swedish team including 2019 World Championship silver medallist Anna Swenn Larsson.
After head coach Christian Thoma tested positive for coronavirus in midweek, the Finnish authorities insisted the skiers go into quarantine despite them producing negative tests.
Shiffrin was making her return to World Cup action after a 300-day break prompted initially by the death of her father Jeff in February.
The three-time overall World Cup winner said on Thursday she was keeping "expectations really low", but looked almost as if she had never been away.
Wearing start bib number one, she descended smoothly on the opening run to clock 54.34s.
After crossing the line, Shiffrin appeared to give a big sigh of relief followed by a broad smile at being back in competition.
Only one woman would beat that time: reigning slalom World Cup champion Vlhova.
The Slovakian ace clocked 54.19s to take an advantage of 0.15s into the second run.
Liensberger was third, 0.52s behind, with no one else within a second of the lead.
Several skiers struggled on the tricky tight middle section of the second descent on a course set by Vlhova's coach Livio Magoni.
Even Shiffrin lost time to Liensberger there, but she stormed through the closing stages to post the quickest second run and take the overall lead.
The pressure was on Vlhova but she responded admirably, skiing the top half superbly to extend the gap to over half a second.
She did not ski the bottom half as well as her American rival, but still managed to beat Shiffrin's second run by 0.03s and repeat her 2017 Levi slalom success.
So four in a row for Vlhova, although she has some way to go to match the run of 12 World Cup slalom triumphs achieved by Shiffrin from February 2015 to December 2016.
The pair will line up again on Sunday for another slalom with Shiffrin no doubt keen to reverse the placings.