Sania Mirza and Barbora Strycova were outdone in straight sets 6-4, 6-3 by the unseeded pair of Gabriela Dabrowski and Xu Yifan.
Sania and Barbora lost the opening set of their semi-final clash on Saturday before staging a brilliant comeback to script a 6-7 6-1 10-4 against their fifth-seeded opponents.
The Indo-Czech pair suffered a 4-6, 4-6 defeat against Switzerland's Martina Hingis and Taiwan's Yung-jan Chan in the quarter-final.
Sania Mirza and Barbora Strycova could next face the team of Martina Hingis and Chan Yung-jan in the Indian Wells women's doubles quarterfinals.
After being outplayed in the first set, Sania Mirza-Ivan Dodig mounted an early fightback in the second. However, Spears and Cabal held off the challenge from the Indo-Croatian pair to carve out a memorable win.
Abigail Spears-Juan Sebastian Cabal registered a memorable straight sets win over Indo-Croatian team of Sania Mirza-Ivan Dodig to capture the 2017 Australian Open mixed doubles title.
If the Indo-Croatian pair manages to win the final, it would be Sania Mirza's first Grand Slam title with Ivan Dodig and fourth Major mixed doubles triumph overall.
Sania Mirza and Ivan Dodig, seeded second in the tournament, overcame a slow start to knock out the local pairing with the match going into super tie-break.
Sania Mirza and Ivan Dodig just managed to edge past Rohan Bopanna and Gabriela Dabrowski to enter the Australian Open mixed doubles semis.
Indian players Sania Mirza and Rohan Bopanna won their respective matches to set up a quarterfinal clash in the Australian Open mixed doubles.
While Leander Paes won his mixed doubles first round match, Sania Mirza went down in her women's doubles Round 3 encounter at the Australian Open.
Both Sania Mirza and Rohan Bopanna won their respective matches to enter the second round of mixed doubles at Australian Open on Saturday.
While Sania Mirza progressed to third round in women's doubles, Rohan Bopanna lost his men's doubles second round match.
Sania Mirza and her Czech partner Barbora Strycova registered an easy 6-3, 6-1 win against the British pair of Jocelyn Rae and Anna Smith.
The top seeded pair of Sania Mirza and Barbora Strycova lost 4-6, 4-6, to their unseeded opponents in a match that lasted an hour and 12 minutes.
Sania Mirza and Barbora Strycova saved all five breakpoints in the semifinal match and broke the rivals twice in each set.
Sania Mirza and Bethanie Mattek-Sands triumphed 6-2, 6-3 against the second-seeded Russian team of Ekaterina Makarova and Elena Vesnina in the Brisbane International women's doubles final
While Sania Mirza ended the year as world No. 1 in women's doubles, Rohan Bopanna criticised the AITA for not getting selected for India's Davis Cup team