Error-prone American Serena Williams set loss to Ekaterina Makarova in the fourth round.
Williams, the No. 12 seed, hit 37 unforced errors and double-faulted seven times in her 82-minute match at Rod Laver Arena, falling to the 23-year-old Russian Makarova 6-2, 6-3.
Barely able to get her first serve in half the time, Williams hit 20 of her unforced errors and four of her double faults in the second set.
Earlier, No. 2 seed Petra Kvitova reached the quarterfinals of the season's first grand slam event with a straight-set win over Ana Ivanovic.
Kvitova, the 21-year-old Czech who beat Maria Sharapova to win Wimbledon last season, came through in a second-set tiebreaker to down the 21st-seeded Ivanovic 6-2, 7-6 (7-2).
The match, also Rod Laver Arena, lasted 85 minutes -- 54 of them for the second set.
Kvitova fired seven aces and hit 30 winners, converting three of her six break points, and moved on to face Sara Errani, who beat Zheng Jie 6-2, 6-1 later on Monday.
Sharapova, the fourth seed, was also in action Monday against 14th-seeded Sabine Lisicki.