The Austrian never looked comfortable against the Swedish underdog, who sprinkled the court with drop shots and kept the No 3 seed on the defensive in their fourth-round match. He won 7-5, 4-6, 6-3, 6-2 and secured a quarter- final meeting with Michael Chang, of the United States.
The world No 3's setback followed the surprise 6-4, 7-6, 7-6 defeat of the No 1 seed, Pete Sampras, at the hands of an unseeded Australian teenager Mark Philippoussis in the third round on Saturday night.
Andre Agassi is on course to regain the No 1 spot - although he had problems before advancing to the quarter-finals with a 4-6, 6-2, 4-6, 6-1, 6-2 win over Sweden's Jonas Bjorkman. The defending Australian champion now needs a quarter-final victory over fellow American and No 8 seed Jim Courier to take the No 1 spot. If Agassi loses, Muster will become No 1.
Agassi, who has been dismissive of Muster's aspirations to be No 1, said: "If I don't win this tournament I don't want to be ranked No 1."
Courier played his second successive five-set match, beating South Africa's Marcos Ondruska 7-5, 2-6, 4-6, 6-4, 6-2, but he admitted he needed to improve to beat Agassi. "I haven't played him for almost a year now, in a tournament anyway," he said. "We always have good close matches, but I'm not going to beat him with the way I played today, that's for sure."
Chang is looming as the tournament's quiet threat after he beat the French qualifier Jean-Philippe Fleurian in his fourth successive straight-sets win, 6-2, 6-3, 6-3.
Argentina's Gabriela Sabatini made a surprise exit in the women's fourth round when she was beaten 6-2, 6-4 by the American teenager Chanda Rubin.
Sabatini blamed the wind and her lack of concentration for 10 double faults as she joined the defending champion, Mary Pierce, and Kimiko Date as the major women's casualties so far.
Rubin, who climbed steadily through the world rankings last year to her current No 14, said she was going into her quarter-final match against Spain's Arantxa Sanchez Vicario full of confidence. "I'm feeling confident every time I walk on to the court and I think the results are now showing that," she said.
Another teenager, Croatia's Iva Majoli, also moved into the quarter-finals, and a meeting with Monica Seles, after an emphatic 6-2, 6-2 win against Belgium's Sabine Appelmans.
Seles advanced with another impressive performance, beating Japan's Naoko Sawamatsu 6-1, 6-3. She has dropped only 14 games in her four matches on the way to the last eight.
Sanchez Vicario moved safely through, disposing of Mary Joe Fernandez, of the United States, 6-3, 6-3.Reuse content