The Spanish 36-year-old, who was struggling with what appeared to be a hip injury, slumped 6-4, 6-4, 7-5 under a closed roof on Rod Laver Arena.
Rafa Nadal, the defending champion, was forced to withdraw from the Australian Open on Wednesday after picking up an injury when losing to American Mackenzie McDonald 6-4 6-4 7-5. Nadal's performance at this Grand Slam was his poorest in seven years.
In addition to upending the men's draw, Nadal's elimination throws a wrench in the race for Grand Slam titles. Nine-time winner Novak Djokovic could catch up to Nadal in major titles with a 10th victory at Melbourne Park.
At Rod Laver Arena, Nadal looked to hurt his left hip when racing for a backhand late in the second set. After receiving treatment from a trainer, he took an off-court medical timeout with the score 6-4 5-3.
He returned with a dejected expression to finish the match, but it was obvious that his movement had been compromised, especially on his backhand side, allowing McDonald to foil the Spaniard's attempt to win a third championship at Melbourne Park.
Prior to getting hurt, McDonald played brilliantly to win the opening set, going toe-to-toe with the 36-year-old Spaniard and dominating the most of the fierce baseline battles.
It is always difficult to win a fight against a top opponent of that caliber, according to McDonald. "He's a tremendous champion, he's never going to give up regardless of the situation," McDonald added.
He sort of pulled me out of that with what he was doing as I was trying to be so concentrated on what I was doing. But I managed to get through it kind of by just concentrating on myself.
McDonald, who defeated Nadal in the second round of the 2020 French Open in just four games, recalled their previous encounter at Chatrier as one in which he "kicked my butt."
"On clay, it's difficult to get a hit through, but on hard, I felt like I had a chance, and I really wanted to beat him. I'm really happy I got my shot and pulled it off."
Following his break, Nadal came out to the court to a loud cheer and received further acclaim as he maintained service.
Though his dejected countenance said it all, he rejected to recover a drop-shot in the following game, shaking his head at his anxious support group.
When Nadal smacked a forehand into the net and the Spaniard thudded his racket into his chair at the change of ends, McKenzie won the second set.
Leaning heavily on serve and relying on touch, Nadal dragged McDonald deep into the third set but was finally broken to 6-5 when the American bolted forward to flick a passing shot past him.
In a last-ditch effort, Nadal charged the net, but there was no chance of a replay of the "Miracle of Melbourne," in which he defeated Daniil Medvedev after falling behind two sets to one.