The top-seeded Russian won four straight games to clinch the first set. But she made some errors to drop the second, and faded in the third. Sharapova had a first-round bye. She held a 13-0 record in Stuttgart before the loss.
Sharapova will lose the No. 2 ranking in the world to
Earlier, Madison Brengle of the United States upset third-seeded
After dropping the first set, Nadal appeared to have rebounded by breaking the Italian three times in the second set, but Fognini answered each time.
In the tiebreaker, Nadal trailed 6-3 but came back to 6-6. Fognini went ahead, and Nadal drove a shot long for only his third loss at the tournament.
Nadal, a nine-time
Nadal has failed to reclaim his title at two tournaments he has won a record eight times, casting doubt on his ability to defend the French Open title. Nadal's next tournament will be in two weeks in Madrid.
The 13th-seeded Fognini, who had never won a match at the Real Club de Tennis before winning his second-round opener, will next face
Earlier, defending champion
Nishikori will next play Roberto Bautista Agut after the Spaniard defeated 10th-seeded
Ferrer will meet
Top-seeded Simon converted three of his five break points in winning the pair's 10th meeting 7-5, 6-4, as he improved his record in Bucharest to 19-3, having won the trophy in 2007-08 and 2012.