A quarter-finalist in Melbourne previous year, the second-round defeat was Muguruza's earliest at the season's opening grand slam since she was beaten at the same stage in 2013.
Defending champion Federer was never troubled by France's Richard Gasquet, who has failed to take a set off him since 2011, as he steamed into the last 16 with a 6-2, 7-5, 6-4 win.
The Rod Laver Arena evening clash between the only two grand slam winners left in the women's draw had the feel of a showpiece final rather than a third-round match-up but only 21st seed Kerber rose to the occasion.
The heat intensified as six-time champion Novak Djokovic extended his personal streak against Gael Monfils to 15-0 with a 4-6, 6-3, 6-1, 6-3 victory in which both players slouched over in the shade at the back of the court between points.
The Wimbledon champion, seeded third, struggled physically as temperatures soared in Melbourne and had treatment to her left foot in the first set.
Strycova will next face compatriot Karolina Pliskova, who she accused of stealing her coach Tomas Krupa past year.
Kerber, seeded 21st, needed a little more than an hour to see off the 2008 champion, breaking Sharapova's serve five times.
The Spaniard romped through his opening three matches without dropping a set, and is again expected to reach the championship match where he would attempt, for the third time, to complete a double Career Grand Slam. Chung advanced when Mischa retired with a viral illness while trailing 6-2, 4-1.
Konta had been a semifinalist and quarterfinalist in recent years but was bounced out by American Bernarda Pera who prompted a hurried google search by everyone.
Tomas Berdych beat 2009 U.S. Open champion Juan Martin del Potro in straight sets and fifth-seeded Dominic Thiem beat Adrian Mannarino to set up a match against Tennys Sandgren.
"I'm a little bit exhausted of it!"
The crafty Latvian had knocked Sharapova out of the fourth round at Flushing Meadows past year during the Russian's return to Grand Slam action after a 15-month doping ban. The world No 76 had three straight match points before losing 4-6 6-4 15-13 in what was the joint longest women's match here in the modern era.
The two greats of the game - who have won 11 Australian Opens between them - could meet in the last four if they maintain their winning ways.
"Austin, two-time U.S. Open victor, tweeted: "@Simona_Halep and @LaurenDavis93 are incredible warriors!
Hsieh defeated the former world No.2 in a fascinating match that finished 6-2 7-5 after an hour and 39 minutes on Margaret Court Arena last night.
"Tough condition for playing today, happy that we made it under this heat, onto R16", said Latisha Chan on her Facebook page.
"It's awesome to make the fourth round again after 10 years", said the emotional world No. 88 after the win on Margaret Court Arena.