Top seed Halep took no prisoners against Williams, blitzing the 38-year-old American 6-2, 6-2 in just 71 minutes to reach the quarter-finals.
Maria Sakkari won 6-4, 7-6 (7/2) against former world number one Venus Williams.
Kiki Bertens, who reached the French Open semi-finals in 2016, had never before been past the Wimbledon third round.
Roger Federer delivered a Centre Court masterclass lasting 89 minutes as the Swiss star hit 48 winners and 16 aces in his 6-4, 6-4, 6-1 victory.
In all the four Slams, it's only the sixth time in the Open era that the defending champion has perished at the first hurdle.
Seven-time major winner Venus Williams suffered back-to-back opening-round exits at the Slams for the first time in her 21-year career.
Serena and Venus Williams have won 14 Grand Slam doubles titles as a team.
Simona Halep needed to reach at least the last eight and go further than world number two Caroline Wozniacki to retain the top-ranking going into the French Open.
Venus Williams showed no signs of fatigue to power home 5-7, 6-1, 6-2 in two hours and 19 minutes.
Venus Williams, who at 37 is the oldest player in the women's draw, has played sparingly this year but is just beginning to step up her game
It was the first meeting between the two Williams sisters since they clashed in the final of the 2017 Australian Open.
Venus and Serena have faced each other 28 times in their legendary careers and they are now meeting in Serena's first tournament back on the WTA Tour since she beat Venus 6-4, 6-4 in the 2017 Australian Open final.
It was Serena Williams' first competitive match since winning her 23rd major at the 2017 Australian Open.
Venus Williams' win came in her 1,000th career match and her 22nd singles appearance in a tournament she first played in 1999.
Serena Williams had initially targeted last month's Australian Open but abandoned that goal after declaring she was not "where I personally want to be."
The fifth seed and last year's finalist was shocked 6-3, 7-5 in the first round by the world number 78 in just under two hours on Rod Laver Arena.
Police concluded neither driver was at fault and no charges would be filed in the collision which took place in a busy intersection in Palm Beach Gardens, the South Florida Sun-Sentinel newspaper reported on Wednesday.
Serena Williams and husband Alexis Ohanian took to Instagram to share some intimate moments of their big day.