The top seeded Indo-Swiss duo went down 4-6 6-0 6-10 to the unseeded Chinese Taipei's sister pair of Hao-Ching Chan and Yung-Jan Chan in an hour and 14 minutes in the USD 2,701,240 Cincinnati Masters.
In the opening set, the Chans clinched four breakpoints against three by Sania and Martina to take an upper-hand in the match.
But the top-seeded pair came back strongly in the second set as they won six consecutive games to simply run away with the set. Converting all three breakpoint chances that they got, Sania and Martina took the game to the decider.
With this victory, the Chan sisters have levelled their head-to-head record to 1-1 against the Indo-Swiss combination. They had lost to Sania and Martina in Toronto earlier this year.
Earlier, Leander Paes and Rohan Bopanna were ousted from the men's doubles competition after losing their matches with their respective partners.