The world no.1 and four-time champion lost the Italian Open final to no.2 seed Andy Murray 3-6, 3-6 in one hour and 35 minutes.
Nole recovered from a set down to beat no.6 seed Kei Nishikori 2-6, 6-4, 7-6 in the semi-finals of the ATP Masters 1000 event in Rome.
Djokovic beat no.5 seed Rafael Nadal 7-5, 7-6 (4) in titanic battle to progress into the semi-finals of the Italian Open on Friday.
The top seed defeated world no.37 Thomaz Bellucci 0-6, 6-3, 6-2 to set up a quarter-final showdown with Rafael Nadal (ESP, 5).
Nole opened his Internazionali BNL d’Italia campaign with a 7-5,7-5 win over 35-year-old French qualifier Stephane Robert (ATP #103).
The world no.1 clinched his spot in the 2016 Mutua Madrid Open quarter-finals with a 6-2, 6-1 victory over Roberto Bautista Agut.
Novak beat the Next Generation star Borna Coric (ATP #40) 6-2, 6-4 in 78 minutes to move into the last 16 at Caja Mágica.
World no.1 arrived in Madrid with a 28-2 record on the season. The 2011 champion will open campaign against Borna Coric (CRO).
World no.55 Jiri Vesely ended Novak’s Monte-Carlo Rolex Masters campaign with a 6-4, 2-6, 6-4 win in two hours and six minutes on Wednesday.
Novak is a top seed and has a first-round BYE. He will open his campaign against world no.55 Jiri Vesely (CZE).