World number one Angelique Kerber was knocked out of the Australian Open on Sunday in a stunning upset by a supremely confident Coco Vandeweghe, as yet another big seed was sent packing early.

The German, defending a Grand Slam title for the first time, had no answers to the big-hitting American who powered past her 6-2, 6-3 on Rod Laver Arena to make the quarter-finals in one of the biggest wins of her career.

Kerber's meek demise follows the early exits of women's third seed Agnieszka Radwanska, fourth-ranked Simona Halep and sixth-seeded Dominika Cibulkova at a tournament that has been thrown wide open.

On the men's side, Andy Murray and Novak Djokovic suffered similar fates.

Top-seeded Kerber was bidding to be the first woman to successfully defend an Australian title since Victoria Azarenka in 2013, but it all went horribly wrong against a player ranked 35.

"It's really special, to play a number one player in the world on any stage and any round. So I think I believe this is my first number one win. I'll take that," said Vandeweghe.

"Last year I came here and didn't win a match. Now here I am. It was just another opponent in the way of my goals for this year," she added.

"I set a goal this tournament of making the quarter-finals and the semi-final of a Grand Slam this year."

Vandeweghe, who made the Wimbledon quarter-finals in 2015 but had never been past the third round in Melbourne, now faces dangerous seventh seed Garbine Muguruza for a place in the last four.

Muguruza blasted into her first Melbourne quarter-final with a two-set thumping of Romania's Sorana Cirstea.

The Spanish French Open champion is in ominous touch with either Venus Williams or Russia's Anastasia Pavlyunchenkova awaiting her or Vandeweghe in the semis.

Kerber had been slowly getting into her groove after an indifferent build-up to Melbourne, with early exits in Brisbane and Sydney this month.

But the fiercely competitive American was full of confidence after ending the campaign of Canadian comeback queen Eugenie Bouchard in round three.

She wasn't overawed by a packed crowd on Rod Laver Arena, easily holding serve and troubling the left-hander by cranking big backhand and forehands from the baseline.

A break came her way in the fifth game after a long rally produced a forehand winner and she broke again soon after, unsettling Kerber as she kept racing to the net to win points.

Rattled, the world number one regrouped and three unforced errors then a double fault on the Vandeweghe serve handed her her first break of the match in the opening game of set two.

But she looked unsteady self and a weak backhand to the net allowed the American to break back for 3-3 with Kerber having no answers.

Muguruza said earlier that she was looking forward to testing herself against the American, if she upset Kerber.

"We've played a lot, a couple of times. It's 1-1 head-to-head. She's a tricky player. She has a lot of power, full shots, serve, everything. She can play very well," she said.

In her match, Muguruza was running hot against Cirstea and was in the zone from the beginning.

A thunderous hitter of the ball, she played an aggressive baseline game to overpower the Romanian.