The stage was set for Williams to continue her rivalry with Maria Sharapova in the Madrid final but the Russian lost to her compatriot Svetlana Kuznetsova on a day of surprises.
Williams was playing her first tournament of the year on clay which is not her favourite surface and she rode her luck to get into the quarter-finals after saving three match points against Victoria Azarenka.
She was a long way below her best against Kvitova but the 33-year-old American is building up towards the French Open at the end of this month and she feels she is on course.
"I'm just exhausted today. This has been a rough week for me," Williams told a news conference.
"It's all part of the clay though. It's good to be really exhausted now going into another tournament and then getting ready for Roland Garros.
"So this is all great preparation that I actually really, really needed something to push me to the wall and to the limit."
Williams gave credit to Kvitova for a victory that prevented her from extending to 28 matches an unbeaten run stretching back to October.
"I think she just played well today. I mean she went for broke on every serve and every return," Williams said.
"I hit some second serves which she just hit for winners. I was very slow off the mark. On my serve I wasn't moving as well as I should have. I wasn't in it, this wasn't Serena today.”

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