O'Sullivan will not be adding a fourth Welsh Open to his stacked trophy cabinet this week, after losing out to 39-year-old Ricky Walden in the last 16.
Walden raced to a 3-1 lead, and had to weather a comeback from O'Sullivan, who hit breaks of 88 and 85 to draw level in the match.
But Walden, who has never passed the quarter-finals of the Welsh Open before, kept his composure despite O'Sullivan's improving form.
He won the early battle of the safeties before sealing the win with a break of 83.
It wasn't the only time O'Sullivan was forced to fight back from behind either. The 46-year-old twice fell behind in his last 32 match against Ding Junhui before coming back to win 4-2.
Following the match, O'Sullivan was keen to pay respect to his opponent, labelling him one the "nice guys" in snooker.
"He played a great match, a great break in the last frame, a brilliant pink. He deserved his victory," said O'Sullivan.
"I'm over the moon for Ricky. There's some real nice guys on the circuit and he's one of them, I could never begrudge him any of his wins.
"I'm buzzing for him, he's been through a lot, he's a fighter and it's good to see him back playing well and enjoying the game."
Walden was relieved to have claimed the victory, and after recovering from a back injury, the Englishman seemed excited to get his form back on track.
"It's been well documented that I was injured for a while, my confidence went and my ranking went," said Walden.
"I feel as though I'm on my way back now, I feel as though I've stabilised. I'm playing some good stuff and I've just got to keep working hard.
"It's satisfying just to be out in the arena, let alone winning.
"It was a good match to play in. When you are playing Ronnie and you're both going for shots it's an enjoyable game to play and pleased to come over the line in the end."
Now in the quarter-finals, Walden will face compatriot Joe Perry for a place in the final four.