Australian 17th seed Ashleigh Barty reached the third round for the first time with a 6-4, 7-5 win over fellow former Wimbledon junior champion Eugenie Bouchard.
"She played really well".
The 36-year-old Swiss proceeded to win his 29th consecutive set at the All England Club and wrap up victory on Centre Court with an ace on his first match point in just over one and a half hours.
Five-time champion Williams is now the eighth of the top 10 seeds to be knocked out by the opening Friday.
It was easier to play facing a deficit, Keys said - "When you're down a set and 4-0, it's a lot easier to be, like, oh, I probably should play better now and do that" - but she admitted that throughout the final set, stepping up to the baseline to serve had been nerve-wracking every time.
The defeat of the U.S. Open runner-up meant she became the seventh casualty in the top 10 women's seeds before the middle weekend.
Williams and Evgeniya Rodina are the only remaining mothers of the six who had entered this event - and they will face each other in the fourth round Monday.
"Honestly, I think today was a massive mishandle of nerves", the 23-year-old told reporters.
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Meanwhile in the doubles, South Africa's Raven Klaasen and his New Zealand partner Michael Venus advanced to the second round when they defeated Australia duo Lleyton Hewitt and Alex Bolt 7-5, 6-2, 3-6, 6-1.
"Serena is my idol", Rodina said.
However, she lost her way after that and went a set and 4-0 down before recomposing herself and taking it to a third. "So it will be great to play against her".
The American player won five games in a row to level and then broke back to make it 4-4 in the third set, but Rodina earned another break to secure victory.
It is the biggest win of Pella's career and he is now in the third round of a Grand Slam for the first time.
Fourth-seeded Alexander Zverev reached the third round in the men's event by beating Taylor Fritz of the USA 6-4, 5-7, 6-7 (0), 6-1, 6-2 in a match that was suspended a day earlier after the third set.
German fourth seed Alexander Zverev made the third round, seeing off Taylor Fritz of the United States 6-4, 5-7, 6-7 (0/7), 6-1, 6-2 and faces Latvian qualifier Ernests Gulbis for a spot in the last 16.