Murray swamped Sam Querrey 6-4, 6-2, 6-4 and Federer humbled Tomas Berdych 6-2, 6-4, 6-4 in just 90 minutes, maintaining his 100 percent record over his old rival at Melbourne Park.
Women's world number one Angelique Kerber also hit form as she dropped only four games against Kristyna Pliskova to race into a fourth-round meeting with America's Coco Vandeweghe.
Murray and Federer had both watched from afar on Thursday as Djokovic, the defending champion and six-time winner, suffered a stunning defeat to 117th-ranked Denis Istomin.
He put Querrey away 6-4, 6-2, 6-4 in just under two hours, winning 77 percent of points on his first serve and facing only three break points in a clinical display.
The Scottish world number one also showed no signs of discomfort in his right ankle, after he rolled it painfully during his second-round win over Andrey Rublev.
"I felt better and better as the match went on in terms of my movement," he said. "The ankle was a little sore and I was a little tentative at the start but it got better and better through the match."
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Federer, 35 and returning from an injury lay-off, said he even surprised himself with an imperious win over Berdych that left the Czech shaking his head as he departed.
"In practice things were going well, but I've never been the practice king. I was winning tons of sets," Federer said, adding: "It's been unbelievable. I did surprise myself."
Japan's Nishikori should provide a stern test for Federer and the fifth seed underlined his confident form by seeing off Slovakian qualifier Lukas Lacko 6-4, 6-4, 6-4.
Stan Wawrinka, the 2014 champion, survived a four-set tussle with Viktor Troicki 3-6, 6-2, 6-2, 7-6 (9/7) and now faces Italy's Andreas Seppi, who ousted Steve Darcis of Belgium.
In the women's draw, Kerber finally got into her stride with a 6-0, 6-4 destruction of Kristyna Pliskova, the 58th-ranked twin sister of Czech fifth seed Karolina.
The German defending champion was an early loser at both of her warm-up tournaments and was taken to three sets in unconvincing wins in round one and two.
But Kerber clicked into gear against Pliskova, winning in just 55 minutes to set up a last-16 clash with America's Coco Vandeweghe, who ousted Canadian starlet Eugenie Bouchard.
Svetlana Kuznetsova outlasted fellow thirty-something Jelena Jankovic 6-4, 5-7, 9-7 and will next play fellow Russian Anastasia Pavlyuchenkova.
Venus Williams beat Duan Yingying 6-1, 6-0 to end Chinese interest, earning a match with German qualifier Mona Barthel who overcame Australia's Ashleigh Barty in three sets.
French Open champion Garbine Muguruza was a 6-4, 6-2 winner against Anastasija Sevastova, setting up an encounter with Romania's Sorana Cirstea.
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