Looking to make British Open Era history in his 10th consecutive SW19 quarter-final by joining Johanna Konta in the last four, the two-time champion frittered away a one-set led on two separate occasions and struggled with a persistent hip problem as he crashed out 6-3 4-6 7-6 (7-4) 1-6 1-6.
Querrey meanwhile is into his first major semi-final at the 42nd time of asking following a sublime serving display as he took full advantage of Murray's physical issues.
Defeat threatens to end Murray's unconvincing spell as world number one, which will be curtailed if Novak Djokovic goes on to claim his fourth Wimbledon title, and represents another damaging result in an already disappointing 2017 season.
A straightforward first set flashed by in less than 30 minutes, with Murray following an opening hold to love by crucially claiming the second of three break points offered up by a smattering of unforced errors from his initially nervy-looking opponent.
The second set remained on serve until game number seven, when Murray engineered three more break opportunities and struggled to hide his frustration as Querrey fought back to deuce with the aid of a questionable serve out wide.
However, the Briton then demonstrated yet more fine athleticism to take his fourth chance with a lovely running lob that was followed by a precise cross-court backhand.
Undeterred by that setback, Querrey, making his second consecutive appearance in the last eight at Wimbledon took advantage of a curious and rapid loss of technique from Murray and broke straight back on a straightforward volley. He then held on the back of that rasping serve and, seemingly out of nowhere, achieved a big swing of momentum by nailing a backhand winner to snatch the second of two set points after an initial shot had crashed into the net.
Murray's injury woe
Neither player seemed able to maintain their composure and a typically animated Murray managed to shake off his disappointment by opening the third set with an immediate break. He held that advantage until another costly dip in form with the sun pitching directly into his eyes helped Querrey utilise a brilliant backhand to level proceedings at 5-5.
Consecutive holds forced a tiebreak, which Murray, now evidently limping, led comfortably as Querrey once again seemed plagued by a sudden onset of nerves before eventually winning it 7-4 with a serve out wide.
With Murray's lateral movement clearly hindered and his concentration seemingly majorly lacking, Querrey helped himself to a double break in the fourth set. The home favourite, unable to summon the trainer to assist with an injury that he was carrying before the match and indeed the tournament, looked a beaten man, serving poorly and hitting off one leg as he failed dismally in his attempt to stave off a nervy decider.
Things went from bad to worse for a hobbling Murray, who quickly trailed 3-0 in the fifth set as he dropped his ninth game in a row. The Scot broke than run but was powerless to prevent Querrey - who had never before been beyond the quarter-finals at a major - becoming the first American male to reach the last four of a Grand Slam since Andy Roddick in 2009.
The world number 28, the lowest-ranked player ever to beat Murray at Wimbledon, will now face Croatia's Marin Cilic for a place in the final after the 2014 US Open champion thrashed Rafael Nadal conqueror Gilles Muller in a deciding fifth set to seal an entertaining 3-6 7-6 (8-6) 7-5 5-7 6-1 victory over on Court One.