Novak, the Australian Open 2011 champion, now has 7,880 points, only 85 less than Roger Federer and 1925 more than fourth-ranked Robin Soderling of Sweden.
Spaniard David Ferrer has surpassed Tomas Berdych, so he is now ranked sixth in the world and the Czech has dropped to position no.7.
Austrian Jurgen Melzer is in the top 10 for the first time in his career, he switched place with Russian Mikhail Youzhny who dropped to no.11.
Djokovic will take a week off before he heads to Rotterdam to defend semi-finals at the ATP World Tour 500 tournament.
ATP top 10 as of January 31:
1. Rafael Nadal (Spain) 12,390
2. Roger Federer (Switzerland) 7,965
3. Novak Djokovic (Serbia) 7,880
4. Robin Soderling (Sweden) 5,955
5. Andy Murray (Great Britain) 5,760
6. David Ferrer (Spain) 4,570
7. Tomas Berdych (Czech Republic) 4,270
8. Andy Rodick (USA) 3,385
9. Fernando Verdasco (Spain) 3,240
10. Jurgen Melzer (Austria) 2,955
SOURCE: Novak Djokovic Official WebSite