Competing in the USTA's wildcard play-offs, the winner of which will receive a place in the field for the Melbourne event, Oudin was beaten 6-4 4-6 6-4 by Gail Brodsky in her home state of Georgia.
Oudin was one of the stars of the 2009 US Open when she beat Maria Sharapova among others. That run helped lift her as high as 31st in the world rankings, but she has since slipped to 165th and has not won back-to-back matches this year.
Brodsky will face top seed Coco Vandeweghe in Saturday's semi-finals after she saw off Taylor Townsend 6-4 6-4.
The other semi-final will be between Madison Keys, who saved match point as she beat Jamie Hampton 9-7 in the final set, and Alison Riske.
Riske had things somewhat easier, posting a 'double bagel' 6-0 6-0 win over Grace Min, the ease of which could prove to be a big factor come Saturday.
In the men's event, top seed Bobby Reynolds crashed out in a thrilling contest with Rhyne Williams, who won 10-8 in the final set.
He'll next face former top-20 star Robby Ginepri, still fighting his way back to fitness after returning to action in the summer following a 10-month spell on the sidelines. Ginepri beat American collegiate champion Steve Johnson in straight sets.
The other semi will see Jesse Levine meet Denis Kudla, who advanced when teenager Jack Sock was forced to retire with cramp when 5-4 down in the final set.