Lisicki, ranked 23rd in the world, also ended Williams’ 34-match winning streak and her attempt to secure a sixth title at the All England Club.
The loss comes as another shock to the tournament, which has seen the exit of a number of top-seeded players, including Roger Federer, Rafael Nadal, Maria Sharapova and Victoria Azarenka.
After losing the first set, Williams seemed to find her feet winning nine straight games to take a 3-0 lead in the third set.
Despite being a break up twice in the third set, Williams soon found herself fighting break points as the German brought it back to 4-4.
Lisicki broke at 5-4, and converted her second match point to win with a powerful forehand.
In an emotional post-match interview, Lisicki said “Serena played a fantastic match. She’s such a tough opponent.”
She added that it’s “just an amazing feeling to win this match.”
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