Two players at opposite ends of the tennis age spectrum authored the upsets of the day.
Croatian veteran Mirjana Lucic-Baroni, a former phenom now a 32-year-old veteran who had to fight through qualifying, shocked second-seeded Halep, the French Open runner-up 7-6 (8/6), 6-2.
And 17-year-old Swiss Belinda Bencic toppled Germany's Kerber 6-1, 7-5.
The reward for the 121st-ranked Lucic-Baroni is a fourth-round meeting with 13th-seeded Italian Sara Errani, who thwarted Williams 6-0, 0-6, 7-6 (7/5).
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"After so many years, it's incredible. I live for this," she said. "I am 32. Every painful moment has been worth it."
The last Grand Slam of the year has now lost four of it's top 10 women's seeds, after the second-round departures of Agnieszka Radwanska and Ana Ivanovic.
Errani's triumph over 19th-seeded Williams wasn't strictly speaking an upset, but the 13th-seeded Italian had to dig deep to notch her first career victory over the American after three defeats.
"I know that was a really tough match, even if I won the first set 6-0 she's an amazing player," Errani said.
And as she expected, five-time Grand Slam champion Williams battled back, racing through the second set to set up a third that turned into a slugfest.
She couldn't hang on, however, surrendering her serve as they battled to the tiebreaker, in which Errani took a 5-2 lead only for Williams to battle back to 5-5 before at last succumbing.