Taylor, who was taking part in his first competitive event in four years, fell to a 3-0 defeat in the quarter-final stage of the inaugural World Seniors Championship.
Painter, who won the opening leg of the match and rarely looked troubled, will now take on Robert Thornton in the semi-finals.
Apart from progressing in the competition, the win over Taylor had wider significance for the 54-year-old.
After all, it was The Power who prevented Painter from reaching darting supremacy back in 2004.
Both men clashed in the PDC World Championship final, and it was Painter who seemed destined for glory as he took a 4-1 lead in a race to seven sets.
However, Taylor was able to mount an incredible comeback and forced the match to a sudden death leg with the score tied at six sets and five legs each.
The Artist ultimately lost the deciding leg as Taylor picked up his 11th world title in what is still regarded as the greatest televised match in darting history.
After 18-years of hurt, Painter finally had his revenge on the same stage where he endured that dramatic final defeat.
The 2011 Players Championship winner will now be eyeing his second major title as he powers on into the World Seniors semi-final.
His upcoming opponent, Robert Thornton, also progressed with relative ease after beating Dave Prins 3-0.
Thornton is touted as one of the tournament favourites after being the only player to post a 90-plus average in all three of his matches.
The other semi-final will see Terry Jenkins and Martin Adams go head-to-head.
Jenkins picked up a 3-1 win over John Walton, while his upcoming opponent took out American Larry Butler with the same scoreline.