The third-seeded Williams, who reached the 2002 final at Roland Garros, lost to No. 29 Agnes Szavay of Hungary 6-0, 6-4.
The seven-time Grand Slam champion was playing for the third consecutive day. She lost the first set of her second-round match against Lucie Safarova on Wednesday before play was suspended because of darkness. Williams saved a match point before beating Safarova on Thursday.
She was also stretched to three sets in the first round.
Defending champion Ana Ivanovic and top-seeded Dinara Safina had little trouble in their matches, both advancing to the fourth round by dominating their opponents again.
Safina defeated Anastasia Pavlyuchenkova of Russia 6-2, 6-0, and Ivanovic cruised past Iveta Benesova of the Czech Republic 6-0, 6-2.
Ivanovic, who won the 2008 French Open final after losing the previous year, has dropped only eight games since being taken to a tiebreaker in her opening match.
(The) score doesnt indicate how hard I had to work for some points, said Ivanovic, a former No. 1. She started playing much, much better in the second set, and started hitting the ball much heavier. I just played really good and stayed in the moment and did what I had to do out there.
The current No. 1 has lost only four games in three rounds. Safina, who is trying to win her first Grand Slam title after losing in the final at Roland Garros last year and in the Australian Open final this year, won her first match 6-0, 6-0. She lost only one game in each set in the second round.
Novak Djokovic reached the third round in the mens tournament, quickly completing his suspended match by easily winning the final set and beating Sergiy Stakhovsky of Ukraine 6-3, 6-4, 6-1.
The fourth-seeded Djokovic won the first two sets Thursday, but the match was stopped because of darkness. He broke Stakhovsky to open the third set and had little trouble the rest of the way.
Its not pleasant when you dont finish a match in one day, Djokovic said. But I was lucky to come back and be two sets up.
Djokovic won his only Grand Slam title at the 2008 Australian Open, but the Serb has reached at least the semifinals at all four major tournaments.
No. 29 Philipp Kohlschreiber of Germany also advanced to the third round, beating 2003 French Open champion Juan Carlos Ferrero 6-4, 2-6, 6-4, 6-7 (3), 6-3 in another match suspended by darkness Thursday night.
No. 8 Fernando Verdasco of Spain, No. 10 Nikolay Davydenko of Russia and No. 12 Fernando Gonzalez of Chile reached the fourth round.