Stephens, the 15th seed, has now reached at least the fourth round at every grand slam tournament this year and is likely to face a rematch with Serena Williams, who she beat in Australia, next.
Eighth seed Angelique Kerber has bad memories of Kaia Kanepi after losing to the Estonian from a set and 5-1 up in the second-set tie-break at Wimbledon but the German avenged that defeat in style, winning 6-0 6-4.
Ninth seed Jelena Jankovic had a tougher time of it against Japanese qualifier Kurumi Nara but came through 6-4 7-6 (7/5) to set up a fourth-round meeting with Li.
There was no winning grand slam comeback, meanwhile, for former world number one Martina Hingis.
The Swiss ended six years in retirement a month ago to play doubles in several tournaments with Daniela Hantuchova, but the pair have won only three matches and lost in the first round here to top seeds Sara Errani and Roberta Vinci 6-3 7-5.