The African debutants held Saudi Arabia to a goalless draw in their final Group H match to progress to the knockout stage alongside group winners Spain.
Saudi Arabia entered the contest needing a victory to keep their hopes of reaching the knockout stage alive, but they were unable to breach Cape Verde's disciplined defence.
Cape Verde finished the group stage with three points, having drawn all three of their matches.
Although the game ended 0-0, it was a tense affair, with both sides creating chances but failing to find the decisive goal.
The draw proved enough for Cape Verde after Spain edged Uruguay 1-0 in the other Group H fixture, enabling the World Cup debutants to finish as runners-up in the group.
Spain topped Group H with seven points, while Cape Verde sealed second place with three draws.
Cape Verde will now take on defending champions Argentina in the Round of 32 in Miami on July 4, in what promises to be the biggest match in the nation's football history.