Petra Kvitova and world number seven Caroline Wozniacki made the quarter-finals.
Sharapova was defeated by Timea Bacsinszky in a tight game, losing the first set at the tie break and the second 7-5 -- a result which broke the hearts of the local crowd who were supporting the Russian world number four.
"There were a lot of, you know, times in the match where I did everything right for the first few balls and then didn't execute in the points," Sharapova said.
"I think I always allowed her to get another ball back and to make me play another ball.
"Then obviously that didn't help me, because I was making more mistakes."
The tournament has already suffered the loss of a string of seeds, including world number one Serena Williams, and local hero Li Na announced her retirement days before it started.
Switzerland's Bacsinszky will play her quarter-final match against Wozniacki, who made a flying start as she overcame her opponent Australian Casey Dellacqua.
The eighth-seeded Dane did not lose a game in the first set and eventually won 6-0, 6-3.
Czech third seed Kvitova defeated compatriot Karolina Pliskova 6-3, 2-6, 6-4 to seal her place in the last eight.
Afterwards, she commented on the upsets throughout the tournament, which will have four seeded players in the quarter-finals.
"I saw Maria's match today. She tried very hard. Unfortunately she lost, but it's the tennis," the world number three said.
"At this time a lot of girls are playing so well, and the level, it's so close, and just a few points make the difference."
World number eight Angelique Kerber, the seventh seed in Wuhan, lost only two games in her match with Barbora Zahlavova Strycova of the Czech Republic, crushing her opponent 6-1, 6-1.
"I played a very good match. It was tough, because Barbora is a great player and she played very well," Kerber said.
"I'm happy about my performance today," the German added.
- Second set shock -
Eugenie Bouchard was the last of the seeded players to take her place in the last eight. The Canadian sixth seed disposed of American Alison Riske in convincing style with a 6-2, 6-3 victory in the evening match.
French players Caroline Garcia and Alize Cornet also made it through to the quarter-finals.
Cornet took the first set against Belgian Kirsten Flipkens at the tie-break before she was given a shock in the second, in which she won only one game.
But the world number 22 appeared more dominant in the third set, finally sealing victory with a scoreline of 7-6 (7/4), 1-6, 6-3.
"I think that Kirsten played much better in the second set," Cornet said.
"Already at the end of the first set she was playing better, and it was good that I took this first set."
Cornet described the final games of the match as a "huge fight", adding: "I was just fighting and trying my best. At the end it worked out."
Garcia continued her fine run at Wuhan with victory over Coco Vandeweghe.
The 20-year-old rising star, who claimed the scalp of world number six Caroline Radwanska in the second round, defeated the American 6-3, 6-2 to make it through to the quarter-finals.
Garcia will meet Kvitova in the quarters, while Cornet will face Bouchard.
Spaniard Garbine Muguruza, another player who performed heroics in the second round, suffered a miserable afternoon after she withdraw from her third-round match with gastritis before a ball was hit.
Muguruza had defeated second seed Simona Halep in the second round.
Her opponent, Ukraine's Elina Svitolina, will meet Kerber in the quarters.
The Wuhan Open in the central province of Hubei features the world's top 20 women players and reaches its climax on Saturday..