Stephens, at 19 is one of tennis' biggest upcoming stars, triumphed 3-6 7-5 6-4 over 31-year-old Williams, who has 15 Grand Slam titles to her name. Williams was held back by injury during the all-American quarter-final, but the result still marks a major breakthrough for Sloane Stephens, who many tip to be a future world number one.
Williams looked comfortable for the first half of the match, with the champion leading her younger rival by a set and a break at one point. However, after requiring treatment for a back spasm in the second set, Williams' performance went quickly downhill.
During the match, court side microphones picked up Williams muttering darkly about having had the "worst two weeks." Speaking after the match, she stood by her assessment.
"For a Grand Slam, absolutely. Absolutely. I'm almost relieved that it's over because there's only so much I felt I could do. I was unaware the microphones picked that up. But, it's been a little difficult. I've been thrown a lot of balls these two weeks."
"I think everyone at this stage in the locker room has something wrong with them, so it's fine. There's no excuse there."
Sloane Stephens started brightly against Williams, holding to 3-3 in the first set. However, the veteran soon began to show her class, winning five straight games to take the first set and lead 2-0 in the second.
Things looked ominous for Stephens, yet the teenager showed remarkable composure to break back and win four of the next five games. With Stephens suddenly enjoying a 4-3 lead, Williams shrieked as she pulled up while rushing for a ball. The doctor was called onto court at the next changeover, and Williams trudged off court for treatment.
Upon her return, her condition had clearly not improved. The rest of the match saw Williams grimacing between most points, with the five-time Australian Open champion's famous serve severely curtailed.
As she fell behind in the third set, an enraged Williams threw her racket to the ground. The outburst earned her a code violation, a frustrating end to a drab day.
You can watch highlights from Sloane Stephens' match-up with Serena Williams below, as well as a post-match interview with the teenager. While it may be too early to call this a changing of the guard, there's little doubt American fans of women's tennis have a precocious new heroine to get behind.