Two-time Australian Open champion Victoria Azarenka beat Barbora Strycova in straight sets to set up a quarter-final tie with Angelique Kerber.
Azarenka, seeded 14th, overcame her toughest test of the tournament, defeating the Czech 6-2 6-4.
The Belarusian, who has never lost to Kerber, had only dropped five games in three matches prior to facing Strycova.
Kerber moved into the last eight for the first time with a 6-4 6-0 victory over fellow German Annika Beck.
The seventh seed prevailed in a one-hour first set that featured seven breaks of serves, but the 28-year-old raced away with the second.
Kerber, a two-time Grand Slam semi-finalist, will have to be at her best against Azarenka whose brilliant start to this tournament has made her one of the favourites for the title.
Despite admitting to feeling below her best, Azarenka needed just 86 minutes to see off Strycova, who made 33 unforced errors.
“I didn’t really feel very good before my match so I’m just happy to win this match, to stay focused and I’m proud of myself for that,” said the 2012 and 2013 champion, who has beaten Kerber in their six previous encounters.
Britain’s Johanna Konta plays Ekaterina Makarova and Shuai Zheng faces Madison Keys in the remaining last-16 matches.
Murray through to quarters
In the men’s doubles, Britain’s Jamie Murray has reached last eight in Melbourne for the first time as he and Bruno Soares beat Briton Dominic Inglot and Swede Robert Lindstedt 6-3 6-4.
The Briton’s new partnership with Brazilian Soares is a promising one as the pair reached the semi-finals in Doha in their first tournament of the year and then won a title in Sydney.
Murray and Soares will play Raven Klaasen and Rajeev Ram after the 13th seeds beat American twins Bob and Mike Bryan 3-6 6-3 6-4.