The pair set up an all-American last-eight clash in Melbourne with contrasting wins.
Williams maintained her blistering form with a 6-2 6-0 annihilation of Maria Kirilenko while Stephens struggled to a 6-1 3-6 7-5 win over Bojana Jovanovski.
And while some observers have claimed Williams is playing a role in overseeing Stephens' progress, the world number three insists she is nothing more than an interested spectator in the 19-year-old's career.
"I would need a better definition of the word mentor," she said. "I just feel like the older one and maybe some of the younger players look up to me.
"It's hard to be a real mentor when you're still in competition.
"I don't feel any responsibility (towards her). I doubt she has any expectations of me to be responsible for anything. Maybe she does. I don't know."
Stephens has been tipped to follow in the Williams sisters' footsteps and become the next great black player to emerge from the US.
And Williams was impressed when they met two weeks ago in Brisbane.
"I took a lot from that match," she said of the 6-4 6-3 win.
"She plays well. Like I said after the match, she can be the greatest player. I feel like it will be another good match and a good opportunity for both of us. One of us will definitely be in the semi-finals which is awesome."
Victoria Azarenka is ready for some "top battles" as she bids to defend her title here - starting with a tricky-looking quarter-final against Svetlana Kuznetsova.
Azarenka breezed through her last-16 encounter with Elena Vesnina, winning 6-1 6-1 in 57 minutes - the latest in a series of mis-matches in the women's draw.
But Kuznetsova is a different proposition.
Having spent the last six months of 2012 recovering from knee surgery, the two-time major champion is now fit and looking good.
"I think it's going to be a very tough match," said top seed Azarenka.
"I can see Sveta has come back much fresher, much stronger.
"She knows how to handle big stages, big tournaments. She's a grand slam champion as well.
"It's definitely an exciting match for me to be in. I'm sure it's going to be really tough but I will give my best."
Azarenka was pleased to have made untroubled progress today after being embroiled in a three-set battle with American Jamie Hampton on Saturday.
World number 47 Vesnina was overpowered and overwhelmed on Rod Laver Arena with Azarenka returning to the kind of form which carried her to the title 12 months ago.
"I felt like I was playing pretty well today," she added.
"I was focused and in control from the beginning. That was important for me.
"I feel like I'm improving from match to match. I just want to keep going the same way.
"With every match you build up, the top battles are starting now and it's exciting to be this far in the tournament."
Kuznetsova, a former world number two whose lay-off has seen her drop to 75, came through a tough three-setter with former world number one Caroline Wozniacki, winning 6-2 2-6 7-5.