United States' Tennys Sandgren brushed aside third seed Marco Cecchinato
Isner was sent packing after fellow American Taylor Fritz held his nerve in two tie-breaks to win 7-6 (7/3), 7-6 (7/5), while compatriot Tennys Sandgren brushed aside third seed Marco Cecchinato of Italy 6-3, 6-3.
Second seed Fabio Fognini narrowly avoided the same fate, with German's Peter Gojowczyk taking the match to a third-set tie-break before the Italian prevailed 6-2, 3-6, 7-6 (7/5).
The draw - already weakened by the withdrawal of defending champion Roberto Bautista Agut, Tomas Berdych and Gael Monfils - now has only two seeds remaining in Fognini and Pablo Carreno Busta of Spain.
Carreno Busta had an armchair ride into the quarterfinals when Ferrer succumbed to injury just three games into their match.
Former world number three Ferrer has retired from Grand Slams but is making a few appearances at his favourite ATP tournaments in 2019, with Auckland first on the list.
The 36-year-old looked sharp against his fellow Spaniard and they were one game apiece before Ferrer twisted his leg while hitting a cross-court forehand.
He tried to continue with strapping on his calf, managing to win a point on serve before reluctantly calling it quits.
Ferrer received a standing ovation at the tournament he described as "a second home" and said he was sorry his dream of winning a record fifth title was over.
"Of course it's disappointing but don't worry because I've had very good memories here, I'm very proud" he told the crowd.
"Remember, I won the last point," he joked before limping off centre court.
Isner, a two-time champion in Auckland, received a bye into the second round because of his seeding and looked rusty as his booming serve failed to dominate Fritz.
"It feels great. John's beat me twice before and I really wanted to get the win on him" Fritz said after downing the world number 10.
"We had a lot of close points... I like to thing one of the strengths of my game is playing under pressure and handling those big moments well."
Elsewhere, Germany's Philipp Kohlschreiber defeated Ugo Humbert of France 6-4, 6-4 to set up a quarter-final against Fognini.
Britain's Cameron Norrie beat Joao Sousa of Portugal 7-6 (7/5), 6-4 and Argentinian Leonardo Meyer came from behind to down Italy's Matteo Berrettini 5-7, 7-6 (7/5), 6-3.
Hometown hope Rubin "Jose" Statham's campaign ended when the New Zealander fell to Jan-Lennard Struff of Germany 6-2, 6-1.