Australian Open champion Keys stunned at Wimbledon
Keys slumped to a 6-3, 6-3 loss against the German world number 104 in the third round on Court Two.
The 30-year-old is the fifth player among the top six seeds in the women's draw to suffer a surprise exit from this year's tournament.
Coco Gauff, Jessica Pegula, Jasmine Paolini and Zheng Qinwen had already bowed out, though world number one Aryna Sabalenka is still alive.
Keys, who beat Sabalenka to clinch her maiden Grand Slam crown in Melbourne in January, is yet to make it past the quarter-finals in 11 visits to the All England Club.
She made 31 unforced errors in a lacklustre display against Siegemund.
It was a miserable way to spend the fourth of July for Keys while her compatriots celebrated the Independence Day holiday back in the United States.
Siegemund, who beat former US Open finalist Leylah Fernandez in the second round, is through to the Wimbledon last 16 for the first time.
At 37, she is the oldest player left in the women's tournament, with her best Grand Slam singles run coming when she made the French Open quarter-finals in 2020.
"When you beat a great player like Madison you have to be really happy," said Siegemund. "I managed to keep my nerve in the end. If you don't have nerves in this moment you are probably dead.
"It was a big opportunity. You just take a deep breath and remember your strategy.
"All the girls on the tour are perfectionists. I'm the same but there was no pressure for me. I don't feel like I need to prove anything anymore."
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