Williams was one game from victory when she rolled her ankle
She recovered to close out the match 6-2 6-4 but hobbled from the court, and later confirmed she will not play Daniela Hantuchova on Thursday.
Williams had initially been optimistic of being fit for the quarter-final.
"I'm anticipating it'll be OK," said the 13-time Grand Slam champion after her match.
"My initial thoughts [are that] I'm thinking I can play on. But at the same time I don't want to stress it out right now.
"I'm just going to play it by ear and see how I feel when I wake up in the morning."
Williams beat Chanelle Scheepers in round one on Tuesday - her first match since she was fined for an outburst in September's US Open final defeat against Sam Stosur.
Australian Stosur, the top seed in Brisbane, disappointed home fans with a surprise 6-4 6-2 loss to Czech Iveta Benesova.
Serena Williams suffered an injury scare ahead of the Australian Open as an ankle injury forced her to withdraw from the Brisbane International.
The American, 30, fell heavily during a rally when serving for the match against Serbia's Bojana Jovanovski.She recovered to close out the match 6-2 6-4 but hobbled from the court, and later confirmed she will not play Daniela Hantuchova on Thursday.
Williams had initially been optimistic of being fit for the quarter-final.
"I'm anticipating it'll be OK," said the 13-time Grand Slam champion after her match.
"My initial thoughts [are that] I'm thinking I can play on. But at the same time I don't want to stress it out right now.
"I'm just going to play it by ear and see how I feel when I wake up in the morning."
Williams beat Chanelle Scheepers in round one on Tuesday - her first match since she was fined for an outburst in September's US Open final defeat against Sam Stosur.
Australian Stosur, the top seed in Brisbane, disappointed home fans with a surprise 6-4 6-2 loss to Czech Iveta Benesova.
