Second seed Halep fell to a straight-sets loss to Croatian veteran Mirjana Lucic-Baroni 7-6 (8-6) 6-2, coughing up set points when leading 5-2.
The Romanian failed to reach the fourth round at a major this year for the first time, after making the quarter-finals or better at the three previous slams.
German sixth seed Kerber suffered a horrendous second-set collapse, as Swiss teenager Belinda Bencic trumped her 6-1 7-5.
Kerber led 5-3 40-0, only to cough up all three set points, and waste another two on return in the 10th game, as Bencic stormed home to claim five straight games and an upset victory.
The bottom half of the draw is well and truly open, with the only top-10 seeds left in the section including Maria Sharapova (five), Jelena Jankovic (nine) and Caroline Wozniacki (10).
Sharapova outmuscled German 26th seed Sabine Lisicki 6-2 6-4 in a one-hour, 41-minute battle on Arthur Ashe Stadium.
Serbia's Jankovic will take on Bencic in the last 16, after the former world number one obliterated Swede Johanna Larsson 6-1 6-0 in 58 minutes.
Another slam-less former number one, Wozniacki accounted for German 18th seed Andrea Petkovic 6-3 6-2.
The Dane will take on Sharapova for a spot in the quarters.
Italian 13th seed Sara Errani ended the tournament of American 19th seed Williams 6-0 0-6 7-6 (7-5).
Williams served for the match at 5-3 in the third set, but Errani broke back and clinched a thrilling tie-break.
Lucic-Baroni awaits Errani in the fourth round.
Wimbledon semi-finalist Lucie Safarova continued another impressive slam run, getting the better of France's Alize Cornet 6-3 6-7 (3-7) 6-4.
Safarova, the 14th seed of the Czech Republic, won a near three-hour contest over the 22nd seed from France, producing 32 winners to Cornet's 25.
Next up for the left-handed Safarova is China's Peng Shuai, who surpassed the third round with an upset victory over 28th-seeded Italian Roberta Vinci 6-4 6-3.
Peng won an imposing 80 per cent of points when she got to the net, and she is into the last 16 without dropping a set.