The top-seeded Frenchwoman retired due to a right wrist injury while trailing 6-1 1-0 to her Chinese opponent.
Bartoli did not indicate if the injury will prevent her from participating in the upcoming French Open.
The 23-year-old is ranked ninth in the world but has done little since her remarkable run at Wimbledon last summer, when she stunned former world number one Justine Henin in the semi-finals before falling to Venus Williams in the final.
Since that effort at the All England Club, Bartoli is a pedestrian 24-25 - including a 8-12 mark this season - and has not reached a final.
It was unclear when Bartoli, a semi-finalist at this Tier III claycourt event last season, suffered the injury although she appeared to have trouble getting in rhythm from the start of the match. As one of the top two seeds, Bartoli had received a first-round bye.
Peng's opponent in the quarter-finals will be number five seed Katarina Srebotnik of Slovenia, who claimed a 7-6 (7/4) 6-0 win over Tatiana Perebiynis.
Defending champion and sixth seed Anabel Medina Garrigues has returned to the last eight after posting an emphatic 6-1 6-1 victory over Croatian qualifier Ana Vrljic.
The Spaniard, who also won this event in 2005 and is 15-2 lifetime here, will next face fourth-seeded Italian Flavia Pennetta.
Second seed Alona Bondarenko of Ukraine moved through with a 6-4 6-4 win over Edina Gallovits to set up a quarter-final meeting with unseeded Timea Bacsinszky. Seventh-seeded Ai Sugiyama and unseeded Yung-Jan Chan also advanced and will clash for a spot in semi-finals.