The 29-year-old Spaniard, who was Wimbledon champion in 2008 and 2010 and runner-up in 2006, 2007 and 2011, was humbled 7-5, 3-6, 6-4, 6-4 by dreadlocked German Dustin Brown, the world number 102, in the second round.
Brown, who once was so short of cash that he traveled to tournaments in a camper van, hit 13 aces and 58 winners on the back of a free-hitting, serve-and-volley barrage.
It was 29-year-old Nadal’s first ever defeat to a qualifier at a Grand Slam and came in the aftermath of losing his French Open crown where he had been champion nine times.
Thursday’s loss followed his 2012 second round exit to world 100 Lukas Rosol, a first round beating by the 135-ranked Steve Darcis in 2013 and last year’s fourth round defeat to Nick Kyrgios, who was at 144.
But the 14-time Grand Slam winner and former world number one vowed to fight on in an effort to restore his reputation as the sport’s most feared competitor.
“So I lost. Sad today for that, obviously,” said Nadal, who came into the tournament ranked at 10, his lowest in a decade.
“But that’s sport. Good moments, bad moments. Obviously today is a bad moment for me. I just need to accept these kind of things can happen. I did that all my career.
“I will keep going. It’s not the end. Life continues and my career, too. I have to keep going and working more than ever to try to change that dynamic.”