World number one Mauresmo knocked out the unseeded two-times former champion Williams 6-4, 0-6, 6-2 to set up a quarter-final match against Russian Dinara Safina.
The Australian Open and Wimbledon champion entered the match with a 1-9 record against Williams and has had a long history of wilting under pressure, but she recovered from a second-set disaster in a big way.
"I just tried to leave it behind me," Mauresmo said of the second set. "Maybe in these situations before I would have acted differently in the third set."
Mauresmo won the opening set by getting 61 percent of her first serves in and keeping Williams off-balance with crisp groundstrokes and timely volleys.
But the Frenchwoman's serve deserted her in the second, giving Williams an opening to recover. With Mauresmo's first-serve percentage falling to 44 in the second set, Williams stormed back to force a decider.
Mauresmo began serving well again in the final set and broke Williams in the sixth and eighth games before clinching the 96-minute victory with an angled backhand drop volley.
FELL APART
"I got down an early break and just fell apart after that," lamented Williams.
There were no major upsets on Monday, although 2004 champion Svetlana Kuznetsova, seeded sixth, was sent packing by Serbian 19th seed Jelena Jankovic 6-7, 6-3, 6-2 in fourth-round action.
Second seed Justine Henin-Hardenne, seeking her second U.S. Open crown, breezed past Israel's Shahar Peer 6-1, 6-0 in just 50 minutes, while number three Maria Sharapova and number four Elena Dementieva booked spots in the last eight with straight-sets victories.
Former Open champion and 10th seed Lindsay Davenport blasted 35 winners to oust seventh seed Patty Schnyder of Switzerland 6-4, 6-4 in her fourth-round match.
On the men's side, just one day after sending the great Andre Agassi into retirement, 112th ranked Benjamin Becker of Germany committed 39 unforced errors and was eliminated 6-3, 6-4, 6-3 by ninth seed Andy Roddick.
Second seed Rafael Nadal reached the quarters for the first time by blasting 46 winners to sweep past Czech Jiri Novak 6-1, 7-6, 6-4 in a two-hour and 10-minute match.
But it was the Mauresmo-Williams match before capacity crowd at Arthur Ashe Stadium on a cool evening that produced the most exciting tennis.
Mauresmo has reached the finals of all three grand slam tournaments this year but has never advanced past the semi-finals of the Open.
"I feel my game is really coming together," Mauresmo said. "There are still a few things to adjust but I'm in the quarters. Anyone can get the title right now."
Williams has not played much over the last six months while she recovered from an injury to her left knee. But the seven-times grand slam winner refused to say that was the difference.
MORE CONSISTENT
"I don't think it was a factor," she told reporters. "I think I could have came out on top had I made a few more shots and had I just been a little bit more consistent, maybe have a little bit more fire."
On the men's side, Nadal is quietly working his way through the draw having lost just one set in his first four matches.
While Nadal is almost unbeatable on the slow red clay of Roland Garros, Novak believes the Spaniard could walk away with his first title on the hardcourts at Flushing Meadows.
"His game is excellent, on the hardcourt as well," said Novak. "He's won so many tournaments on the hardcourt already. He can beat any player in the world.
"He's improved a lot on the fast court. Did you see Wimbledon where he reached the final on the grass court? Nobody expected it but he did it."
