Wozniacki tumbles out
Caroline Wozniacki was a high profile casualty in Melbourne as the 10th seed went down 4-6 7-5 6-3 to Garbine Muguruza of Spain.
Muguruza won her first WTA tour event in Hobart earlier in the month as a qualifier and continued that form with a strong performance against Wozniacki after dropping the first set.
It leaves the former world No 1 still in search of a maiden grand slam win and 20-year-old Muguruza cited her improved fitness as the key to victory following ankle surgery.
"I worked really hard in the off-season and this form is the result of that," she said.
"I was really nervous, it was the third round of a Grand Slam and against a great player. I was only thinking about being aggressive and not being scared."
Her reward is a fourth round tie with fifth seed Agnieszka Radwanska, who came through three sets against Russia's Anastasia Pavlyuchenkova.
Maria Sharapova continued her erratic progress into the fourth round with a 6-1 7-6 victory over Alize Cornet of France.
Still rebuilding from a long layoff due to her troublesome right shoulder, the Russian ran hot then cold against the 25th seed, her serve going awry in the second set and only a late rally in the tie-break saving her from another potential marathon.
Sharapova had previously battled through the longest match of her career, a three-hour, 28-minute slug-fest against Italian Karin Knapp, played in blistering heat.
"I just didn't have a great rhythm," said the third seed after hitting 35 unforced errors and landing only half of her first serves.
"It's sometimes nice just to be able to come off the court and groove, just to get a good hit on the ball.
"I still feel like in certain situations I am a bit rusty and I'm not closing it out when I have to or maybe going for a little much or overthinking it a bit.
"That will come. I'm not worried about that. If I'm making those types of errors, they are going to go in eventually."
Second seed and two-time defending champion Victoria Azarenka required just an hour to despatch Austrian Yvonne Meusberger 6-0 6-1.
The world No 49 capitulated under the onslaught from the Belarusian, who is yet to lose a set in this year's tournament as she stretched her unbeaten streak in Melbourne to 17 matches.
Sloane Stephens also progressed, beating Ukraine's Elina Svitolina 7-5 6-4, and will now face Azarenka in a repeat of last year's controversial semi-final.
Serbian eighth seed Jelena Jankovic had to be at her best to get past Kurumi Nara 6-4 7-5, her third Japanese opponent in a row.
The win set her up with a fourth-round clash against Romanian 11th seed Simona Halep, who ousted Kazakh Zarina Diyas in straight sets, while 16th seed Dominika Cibulkova demolished 20th seed Carla Suarez Navarro 6-1 6-0.