The reigning U.S. Open, Wimbledon and Australian Open champion Djokovic dropped the first set against 15th-seeded fellow Serb Viktor Troicki before rebounding for a 4-6, 6-3, 6-1 victory on the indoor hardcourts at Palais Omnisports de Paris-Bercy.
The 2009 Paris Masters titlist Djokovic piled up 44 unforced errors, but also broke Troicki six times en route to the 1-hour, 56-minute victory. He is now 10-1 lifetime against his Davis Cup teammate, including wins in their last 10 meetings.
The 24-year-old Djokovic is now 69-4 this season and enjoying one of the best-ever campaigns in the history of the ATP.
Djokovic's quarterfinal opponent on Friday will be sixth-seeded French crowd favorite Jo-Wilfried Tsonga, who handled Italian qualifier Andreas Seppi 6-3, 6-4 on Thursday. Djokovic beat Tsonga in the 2008 Aussie Open finale.
Tsonga, who was the Paris Masters champ in 2008, has now qualified for the prestigious season-ending ATP World Tour Finals in London in two weeks.
Meanwhile, a third-seeded Federer, who has reached every Masters final with the exception of Paris, handled 16th-seeded Frenchman Richard Gasquet 6-2, 6-4 in 65 minutes on Day 4.
The hot Federer is fresh off his first title in 10 months, as he ran the table in his native Basel last week.
Up next for the 16-time Grand Slam champion will be gritty Argentine Juan Monaco.
The 2011 Aussie Open runner-up Murray mauled 13th-seeded struggling American Andy Roddick 6-2, 6-2. The Scottish Murray is now 8-3 lifetime against the former world No. 1 Roddick, including a 2-0 record this year.
A frustrated Roddick received a warning from the chair umpire in the second set on Thursday after he smashed his racquet on the court.
Roddick hasn't reached a final in almost nine months and will finish a year outside the top 10 for the first time since 2001.
"I just need to get in better shape as far as movement, and kind of catch up a little bit," Roddick said.
Murray, who is now 17-0 since the U.S. Open, will meet fifth-seeded Czech slugger Tomas Berdych here on Friday.
In some other third-round play on Day 4, fourth-seeded Spaniard David Ferrer leveled 14th-seeded Ukrainian Alexandr Dolgopolov 6-3, 6-2 and Berdych beat 11th-seeded Serb Janko Tipsarevic 7-5, 6-4. Berdych, like Tsonga, has also qualified for the World Tour Finals.
The 2010 Wimbledon runner-up Berdych was the Paris Masters champ back in 2005.
Seventh-seeded Mardy Fish, who also has qualified for the trip to London this month, was leading the aforementioned Monaco 2-1 in the third set on Thursday when the American retired from the bout with a thigh injury. Monaco was 1-6, 7-6 (8-6), 1-2 victor.
The 2011 Paris Masters titlist will claim $625,000.