The Wimbledon champion was overwhelmed by the 46th-ranked Santiago Giraldo, 6-3, 6-2. Murray's play was erratic throughout the match against the Colombian qualifier, who earned his first career victory against a top-10 player in 20 attempts.
The eighth-ranked Murray mentioned his split from coach Ivan Lendl alongside his “inconsistent” play.
“My coach is missing. That's quite a big part of my team,” Murray said. “I didn't envision a finish like that. I need to sit down and think about that the next couple of days and see what I need to do.”
Nadal hadn't lost a quarterfinal on clay in nine years until last month in Monte Carlo, and he repeated the disappointing feat in Barcelona.
On Thursday, Nadal let a 3-1 lead in the second set slip before beating Jarkko Nieminen of Finland, 6-1, 6-4.
“For one hour probably I was playing the best tennis that I played for the last three weeks,” Nadal said. “After that I committed errors, so what I need to do is find more consistency.”
Nadal will next face sixth-seeded Tomas Berdych, who beat Grigor Dimitrov of Bulgaria, 3-6, 6-3, 6-2.
Berdych hasn't beaten Nadal since a 2006 meeting in Madrid, which was marked by jeering and angry exchanges between the players.
“He'll be a big test for me,” Nadal said. “What happened is in the past. It was one of the few times I had problems inside a court.”
Also, Japanese player Kei Nishikori improved to 8-0 on clay this season with a 7-6 (5), 7-6 (5) win over Milos Raonic of Canada. Nishikori next faces local favorite Feliciano Lopez who advanced when Austrian qualifier Dominic Thiem withdrew before the match due to an unspecified illness. Thiem upset Stanislas Wawrinka in the second round.
Williams earned her 650th career victory with a 6-2, 6-3 win over Carla Suarez Navarro. Williams, in pursuit of her 60th title, hit 27 winners to her Spanish opponent's five.
“She made me work for every point and it wasn't an easy win,” the top-ranked American said. “She just won last week, so she is definitely not an easy player to play.”
After a poor opening set, the second-ranked Li overcame a slew of unforced errors and a bothersome toe problem to beat Sloane Stephens of the United States, 2-6, 6-3, 6-2.
“After the first set I was like, `Calm down,“’ Li said. “I say, `OK, I cannot only think about what happened for the game, you have to look forward otherwise you cannot make it.“’ Sharapova beat Samantha Stosur of Australia, 6-4, 6-3, while Ana Ivanovic cruised into the last eight with a 6-1, 6-2 win over Anastasia Pavlyuchenka.