The 20-year-old won her first WTA title with victory over Czech Klara Zakopalova at this month's Hobart International, an achievement even more impressive in that she was a qualifier.
She didn't drop a set from the qualifiers to the final and has stayed on a roll at Melbourne Park, coming from a set down to send the 10th-seeded Wozniacki packing 4-6, 7-5, 6-3.
"I worked really hard in the off-season and this form is the result of that," she said, admitting she was nervous in her first ever Grand Slam third round match.
"I was really nervous, it was the third round of a Grand Slam and against a great player. I was only thinking about being aggressive and not being scared."
Wozniacki, recently engaged to golf star Rory McIlroy, remains in search of a first major title despite finishing both 2010 and 2011 as world number one.
Muguruza's reward is a fourth-round clash with Polish fifth seed Agnieszka Radwanska, who came through three sets against Russia's Anastasia Pavlyuchenkova.
"I will play the same against her," said Muguruza. "I'll be aggressive and just try to do my best."
Muguruza's Hobart win saw her sprint up the rankings to a career-best 38, after she recovered from right ankle surgery after Wimbledon that sidelined her for the rest of the year.
Australian Open: Former World No. 1 Caroline Wozniacki suffers shocking third round exit
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