Federer won a tense tiebreak of the second set but still slumped to a 4-6, 7-6(5), 3-6 loss to Frenchman Gael Monfils after two hours and nine minutes, reports Xinhua.
Federer, 32, is battling to qualify for the ATP World Tour Finals for the 12th consecutive year.
Federer recovered from a 3-5 deficit in the second set to force a tiebreak. He went on to win four straight points from 3-5 in the tiebreak to level the match.
However, Monfils broke in the fourth game of the decider and never looked back.
Earlier, ATP World Tour Finals qualifier Ferrer also lost in the round of 16, beaten by German Florian Mayer 4-6, 3-6 in just 81 minutes.
Mayer snapped a four-match losing streak against the Spaniard and the victory is his first Top 10 win of the year.
Mayer will in the quarter-finals take on Frenchman Jo-Wilfried Tsonga, who broke a two-match losing streak against Japan's Kei Nishikori with a 7-6(5), 6-0 win.
Juan Martin del Potro advanced to the last eight without striking a ball when 35-year-old Tommy Haas withdrew due to a back injury.
--IANS (Posted on 10-10-2013)