Djokovic had a third-set tussle with French teenager Quentin Halys before winning their night match 6-1, 6-2, 7-6 (7/3), joining Williams and Roger Federer in the next stage.
As a match-fixing controversy continued to reverberate at Melbourne Park, Williams swatted Hsieh Su-Wei 6-1, 6-2 to reach the third round as she seeks a record-equalling 22nd major title.
Williams eased lingering concerns over the state of her injured knee as she obliterated the Taiwanese, even pulling off possibly her first ever round-the-net shot for good measure.
"I moved much better, so slowly but surely feeling a little bit better," she added.
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Federer, who is trying to extend his record number of Grand Slam crowns to 18, then dismantled his 35th-ranked practice partner Alexandr Dolgopolov 6-3, 7-5, 6-1.
The all-time Grand Slam king came unstuck in the third round last year, when he was shocked by Andreas Seppi, and he is wary of another upset with Grigor "Baby Fed" Dimitrov up next.
"But there's always a danger, you know. Like last year the third round was the end for me, so I hope to go further this time."
Later Djokovic was no match for Halys, 19, who had a net cord to thank as he broke the Serb in the third set, which went to a tie-break.
- 'Opaque and secretive' -
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Chris Eaton, director of integrity at the International Centre for Sport Security in Doha, was speaking after a report claimed several players suspected of being serial match-fixers had never been punished.
The controversy is just the latest to hit the tainted sports world after claims of a doping cover-up shook athletics and multiple scandals engulfed football's governing body, FIFA.
Petra Kvitova became the latest women's top-10 player to fall, joining Simona Halep and Venus Williams on the sidelines when she was shocked 6-4, 6-4 by Australian giant-killer Daria Gavrilova.
In a positive evening for the hosts, the combustible Nick Kyrgios overcame a mix-up with his shorts to beat Pablo Cuevas and set up a showdown with world number six Tomas Berdych.
Agnieszka Radwanska's sky-high confidence took another leap upwards when she halted Eugenie Bouchard, back in form after suffering concussion at the US Open, 6-4, 6-2.
On court earlier was five-time Grand Slam champion Maria Sharapova, who had little difficulty dispatching 105th-ranked Aliaksandra Sasnovich 6-2, 6-1.
Japanese seventh seed Kei Nishikori beat his close friend Austin Krajicek 6-3, 7-6 (7/5), 6-3 as he pressed his bid for a first Grand Slam title.
"Yeah, I watch it every day," deadpanned Williams, when asked if she had seen a recording of the match. "Every night to get ready.