Murray was beaten in last weekend's Moselle Open final

The 20-year-old Scot started slowly and failed to muster a single break point in the first set, while his opponent took advantage with one of his seven.

Murray was 5-3 ahead in the second set, before Tipsarevic reeled off four games on the bounce to claim victory.

Tipsarevic will now meet Radek Stepanek in a quarter-final contest.

A disappointed Murray said he didn't think he had played too badly. "I played one bad game to lose my serve in the first set, but in the second I had so many chances, he said.

Murray added: "I was 5-2 at 15-40 on his serve, then I lost my serve, I also had 0-40 on his serve at 5-4, but I had some pretty rough calls go against me.

"It was tough, as I felt I should have been in a third set."

Defending champion Nikolay Davydenko beat Ecuador's Nicolas Lapentti 6-4 6-4 but second seed Mikhail Youzhny of Russia went out 7-5 6-4 to Germany's Michael Berrer.

Crowd favourite Marat Safin, seeded fifth in his home tournament, also crashed out following a 6-4 6-4 defeat by compatriot Igor Andreev.

Meanwhile, women's champion Anna Chakvetadze was knocked out of the tournament 7-6 (8-6) 6-2 by fellow Russian Dinara Safina.

Serena Williams moved through to the quarter-finals, but she had to work harder than expected to beat Ukraine qualifier Tatiana Perebiynis 7-5 6-4.

The number four seed will now face eighth-seeded Czech Nicole Vaidisova for a place in the semi-final.