The Swiss withstood a fierce onslaught from Li Na to set up a tantalising quarter-final showdown with fourth seed Kim Clijsters.
Li was looking to become China's first singles quarter-finalist at Melbourne Park but having held the upper hand for a set, she withered away under sunny skies to exit 4-6, 6-3, 6-0.
Clijsters had proved to be a roadblock for Daniela Hantuchova on eight previous occasions and the Slovakian again found the title favourite an impenetrable obstacle.
The Belgian romped to a 6-1, 7-5 win in 79 minutes after a wild crosscourt error sealed Hantuchova's fate.
Clijsters and sixth seed Hingis restored calm at the Open a day after five women's seeds, including defending champion Amelie Mauresmo, were bounced out.
Li, who became China's first grand slam singles quarter-finalist at Wimbledon last year, used her searing backhands to flummox the Swiss tactician during the early stages.
The 24-year-old enjoyed a 100 percent success rate on her serve until the final game of the first set. With Hingis unable to get a look in on a second serve, Li stormed ahead but she was eventually undone by her erratic choice of shots which produced 69 unforced errors.
ON FIRE
"She came out on fire, I've never played her before so I knew it would be a difficult match... thank God after the first set I played better," Hingis said.
After fulfilling her side of the deal for a repeat of last year's quarter-final against Clijsters, the Swiss had a message for her friend.
"Kim better win, I'll be waiting, I'll be watching," the three-times former champion said courtside after her one hour 51 minute win.
Clijsters duly obliged.
She was in rampant mood in the opening set and showed no signs of easing off in the second as she opened up a 3-0 lead.
Staring at the lopsided score and facing an embarrassing defeat, Hantuchova snapped herself out of a stupor.
She rallied to level at 5-5 before her resistance crumbled.
"It's always a pleasure to play against her (Hingis), she's such a great champion," Clijsters said.
"I feel I'm doing a little bit better with each match and hopefully I can keep improving."
Anna Chakvetadze avoided the fate of her Russian compatriots Svetlana Kuznetsova and Elena Dementieva, who were knocked out on Sunday, when she reached her first grand slam quarters with a 6-4, 6-1 win over eighth seed Patty Schnyder.
Later on Monday, Melbourne will witness a battle between the only two men to have beaten world number one Roger Federer in 2006.
Rafael Nadal faces Andy Murray across the net for the first time in what should be the opening instalment of an enthralling rivalry between two of the sport's young guns.
Women's top seed Maria Sharapova plays fellow Russian Vera Zvonareva.