Sharapova, who is this year making a comeback from a shoulder surgery in 2008, raced to a 6-3 first set lead before Oudin stepped up her game with aggressive Justine Henin type baseline play to take a 5-1 lead.
The 5 foot 6 inches tall Oudin closed set two out 6-4 as Sharapova would struggle with many doublefaults and with the consistency in her hit or miss power baseline game. A Sharapova forehand down the line wide ended the set on Oudin's seventh setpoint.
In the final set, Oudin took a 3-1 lead after breaking serve then hitting her first ace of the match on gamepoint. With Oudin running most of Sharpaova's powerful groundstokes down, the Russian struggled again with her serve before holding to reach 3-2.
After having an injury timeout for treatment to her shoulder, Sharapova reached 4 all but would not win another game as she would lose 3-6, 6-4, 7-5 after 2 hours and 58 minutes of play.
The Russian, screaming and fighting to the end, failed to counter the American's crafty mixture of offense and defensive. Sharapova would end the encounter with 21 doublefaults.
“I was crying. I was so happy and excited. Every kind of emotion possible. Just an unbelievable feeling,” Oudin said.
“I once again proved to myself that I can compete with these top girls. If I believe in myself and my game, then I can beat them. The main thing was just believing that I could do it.”
In other women's third round play Saturday, Safina led Kvitova 4-6, 6-2, 6-5 before her left-handed opponent would refuse to lose despite her lack of experience in grand slam play.
Kvitova, ranked number 72, fought off matchpoint while serving with a forehand down the line winner before reaching the decisive tiebreaker where she would jump out to a 5-2 lead.
A Safina backhand lob which landed long would seal the upset 6-4, 2-6, 7-6(7-5), but not before the Czech would connect with 47 winners for the day.
In the men's competition, the 2003 US Open champion Andy Roddick of the USA was also upset, as he crashed out to his fellow American John Isner 7-6 (7-3), 6-3, 3-6, 5-7, 7-6 (7-5).
The 6 foot 9 inches tall Isner, one of the tallest ATP Tour players, struck 38 aces in his upset victory.
“It’s obviously, hands down, the biggest win of my career,” Isner said. “Nothing even compares. To do it at the stage I did it on is pretty spectacular.”
Roddick is the last American male to win a grand slam.