Brazilian defender Jadson scored a crucial second for Shandong five minutes from time to leave the tie in the balance as action in the continental club championship returned just three days after the Asian Cup final in Qatar on Saturday.
A 28th-minute penalty from Erison and a diving header by fellow Brazilian Marcinho five minutes later had put J.League side Kawasaki in a commanding position by the interval.
But an improved second-half showing brought the home team back into contention, with substitute Fei Nanduo halving the deficit with a 67th-minute strike from 20 yards that found the bottom corner of Jung Sung-ryong's goal.
Akihiro Ienaga restored Kawasaki's two-goal lead with 11 minutes remaining when he held off Shandong captain Zheng Zheng to latch onto Shin Yamada's header and strike past Wang Dalei.
Jadson ensured Shandong would travel to Kawasaki's Todoroki Stadium next Tuesday with only a single goal deficit when, in the 85th minute, he powered in Gao Zhunyi's right-wing cross.
See a full match summary here.
The last 16 phase continues on Wednesday when Japan's Yokohama F Marinos take on Bangkok United in their first leg meeting while South Korean sides Jeonbuk Motors and Pohang Steelers face each other.
Ulsan Hyundai, also from South Korea, meet Japan's Ventforet Kofu on Thursday.
In the western half of the draw, Cristiano Ronaldo's Al Nassr play fellow Saudi Pro League side Al Feiha on Wednesday, when Uzbekistan's Nasaf Qarshi meet Al Ain of the United Arab Emirates.
Four-times Asian champions Al Hilal travel to Iran to face Sepahan on Thursday when Saudi Pro League title holders Al Ittihad meet Navbahor Namangan from Uzbekistan.
