World number one Djokovic had the chance to make history this week by becoming the first player to win all nine Masters titles, but his hopes of completing the set in Cincinnati were dashed after home favourite John Isner came through 7-6 (7/5) 3-6 7-5.
Defending US Open champion Murray, the world number two, started strongly but faded thereafter and crashed to a 6-3 6-4 defeat against Tomas Berdych.
Djokovic needed to save a break point in his opening service game against the big-hitting Isner, who suffered a surprise first-round loss to Vasek Pospisil in last week's Rogers Cup.
The match went with serve for the remainder of the set and it was only a Djokovic double fault in the tiebreak that handed Isner the initiative, with the 28-year-old taking full advantage.
Isner once again had the opportunity to break his opponent in the opening game of the next set, but reigning Australian Open champion Djokovic showed his mettle.
Indeed, the Serbian would save seven break points before converting one of his three chances to square the match.
Despite Djokovic taking the momentum into the decider, Isner refused to wilt. The American made his march in the 12th game, but while Djokovic saved the first match point with an ace, he double faulted at the crucial time once more and Isner sealed a memorable win.
It is a bitter blow for Djokovic's US Open preparations, although arguably his biggest rival at Flushing Meadows, Murray, fared no better as he came up second best against Berdych.
World number six Berdych had triumphed in the pair's last encounter at the Madrid Masters in May but Murray defeated the Czech en route to his Flushing Meadows win last year.
And it seemed the Wimbledon champion was at the top of his game on Friday after Berdych barely escaped his opening service game before Murray opened his account with four aces.
The two-time grand slam champion continued to pressurise his opponent's serve, but Berdych held firm and then broke in the eighth game after Murray netted a forehand.
Berdych served to love to wrap up the first set and then staved off three break points in his next service game.
It proved to be a crucial hold as Berdych then broke 2008 and 2011 Cincinnati winner Murray in the next game at the second attempt.
Despite fleeting moments of quality, Murray failed to force his way back into the contest and a composed Berdych held his nerve to set up a clash with either Rafael Nadal or defending champion Roger Federer.
Murray admitted he found the court conditions difficult to deal with.
"The court was lively today [Friday]," Murray told atpworldtour.com. "It was bouncing pretty high. It was quite tough to control the ball. I made too many errors.
"You have tactics for each player and sometimes executing the tactics is tough. That can be down to the way that your opponent plays. Sometimes it's the way that he plays. Sometimes it can be the conditions. You need to make adjustments."