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Dimitrov outlined his credentials on grass by winning the Aegon Championships at Queen's Club last month and Murray had no answer to the powerful Bulgarian, who won 6-1 7-6 (7-4) 6-2 to stun an expectant Centre Court crowd.
It was an error-strewn display from Murray, who cut a frustrated figure as his title defence was ended and 11th-seed Dimitrov celebrated an emphatic win.
He will now face Novak Djokovic in the semi-final, who recovered from a two-sets-to-one deficit to overcome Croatian 26th-seed Marin Cilic.
The top-seeded Serbian needed all of his staying power to fight back and secure a 6-1 3-6 6-7 (4-7) 6-2 6-2 triumph.
Djokovic dropped only one set en route to the last eight and had won all nine of his previous encounters with Cilic, but last year's runner-up needed three hours and 24 minutes to see off the world number 29.
Cilic had only ever made the fourth round at Wimbledon before this week, but he was just a set away from the last four until Djokovic dug deep to show why he is favourite to secure his second title at the All England Club.
Fourth-seed Roger Federer turned on the style to demonstrate that he is more than capable of claiming an eighth WImbledon title in a 3-6 7-6 (7-5) 6-4 6-4 victory over Swiss compatriot Stanislas Wawrinka.
Wawrinka described facing Federer at Wimbledon as "one of the biggest challenges in tennis" ahead of their last-eight showdown and the Australian Open champion was unable to overcome his compatriot after a promising start.
Federer crashed out in the second round with a shock defeat to Ukrainian Sergiy Stakhovsky last year, but the 17-time grand slam champion has looked a force 12 months on and will now face Canadian Milos Raonic at the semi-final stage.
World number four Wawrinka had never previously progressed beyond the fourth round at Wimbledon and fatigue appeared to get the better of him as he crashed out in the last eight.
Australian teenager Nick Kyrgios pulled off one of the great Wimbledon shocks to knock out world number one Rafael Nadal on Tuesday, but his hopes of facing Roger Federer in the semi-final were ended by big-serving Raonic.
The 19-year-old became only the second player from outside the top 100 to defeat a world number one at a grand slam event when he ousted Nadal, but Raonic overpowered him 6-7 (4-7) 6-2 6-4 7-6 (7-4).
Raonic rounded off a memorable day for Canada after Eugenie Bouchard had also reached the women's semi-finals and Federer will have to work out how to combat the 22-year-old's powerful serve, which he showcased by firing down 39 aces against a helpless Kyrgios.