During a run of four breaks against her, Sharapova won only three points on her own serve and fell 5-0 behind in the second set.
The four-time major winner rallied to win four straight games before Cibulkova held to level the match. After taking an off-court medical timeout after the second set for a hip strain, she was broken immediately and had seven double-faults in the third set.
Sharapova was two tournaments into a comeback from a prolonged layoff with a right shoulder injury, and said her run to the fourth round was a positive sign because she was healthy and back on tour.
"I have to look at the positives and see where I have come from in four or five months. I haven't played a lot of tennis in those six months," said Sharapova, who won the Australian title in 2008 and lost two other finals.
"So I certainly would have loved to play a little bit more before playing a Grand Slam, but this is the chance that I was given."
Top-ranked Williams, a five-time Australian Open champion, was knocked out in a three-set loss to 14th-seeded Ana Ivanovic on Sunday, and later revealed she had a back problem that had her considering withdrawing from the tournament.
Sharapova made it hard for herself in Australia, having difficulty closing out her second- and third-round matches. She needed almost 3½ hours to beat Karin Knapp in searing heat the second round playing 50 minutes between her first and final match points. She said she couldn't use the heat wave as an excuse for her loss, and added that the hip strain wasn't anything out of the ordinary for a tennis player.
The pair are evenly split in six head-to-heads, but Cibulkova has won two of their three matches at the majors with her win Monday and her quarterfinal victory at the 2009 French Open.
Also Monday, two-time champion Victoria Azarenka defeated Sloane Stephens 6-3, 6-2.
The men's draw progressed more according to rankings when three-time defending champion Novak Djokovic and No. 3 David Ferrer advanced to the quarterfinals, along with No. 7 Tomas Berdych and No. 8 Stanislas Wawrinka.