The five-time former champion fell to Nick Kyrgios 4-6, 6-7 (3) in the fourth round of the BNP Paribas Open, an ATP Masters 1000 event in Indian Wells.
Djokovic earned his 300th ATP World Tour Masters 1000 victory, beating no.31 seed Juan Martin del Potro 7-5, 4-6, 6-1.
The defending champion goes on to face no.31 seed Juan Martin del Potro for a place in the ATP Masters 1000 event last 16.
Novak will begin title defence in Indian Wells against either Kyle Edmund (GBR, ATP #46) or Gastao Elias (POR, ATP #95) in round two.
Novak has suffered quarter-final exit at the BNP Paribas Masters on Friday after he fell to no.9 seed Marin Cilic 4-6, 6-7 (2).
Novak continued his quest for a fifth Paris Masters title with a 4-6, 6-2, 6-3 win over Grigor Dimitrov.
The reigning Paris Masters champion beat world no.34 Gilles Muller 6-3, 6-4 and next faces no.14 seed Grigor Dimitrov (Thursday).
Nole is no.1 seed and will open his quest for a fifth title in Bercy in the second round against world no.34 Gilles Muller from Luxembourg.
Novak’s quest for a fourth Shanghai Rolex Masters crown is over after a surprise 4-6, 4-6 semi-final defeat to Roberto Bautista Agut.
Defending champion remained on course for a fourth Shanghai Rolex Masters crown as he beat Mischa Zverev 3-6, 7-6 (4), 6-3.