Three-time grand slam champion Wawrinka underwent knee surgery after a first-round loss at Wimbledon, cutting short his 2017, and revealed he was still experiencing discomfort following a victory over Ricardas Berankis on Tuesday.
On a searing hot day at Melbourne Park when the temperature hit 104 degrees, No. 9 Wawrinka, No. 7 David Goffin and No. 13 Sam Querrey were the three seeded players to fall in the men's draw.
Stan Wawrinka was sent tumbling out of the Australian Open in the second round, in a painful exit to Tennys Sandgren. With the win, he is the first Vol to reach the third round of a major since head coach Chris Woodruff played into the third round of the 2001 Australian Open.
Federer, in the hunt for a sixth Melbourne title and 20th Grand Slam singles title, won 6-4, 6-4, 7-6 (7-4) against German Jan-Lennard Struff.
Six-time champion Novak Djokovic showed iron-man stamina as he battled hothouse conditions to overcome tired Frenchman Gael Monfils 4-6, 6-3, 6-1, 6-3. "But during the match, I just forgot about it".
The third seed, whose preparation was hampered by a thigh injury, was always trailing against the 88-ranked Hsieh Su-wei from Chinese Taipei before being edged out 7-6 (1), 6-4 in one hour and 59 minutes on Rod Laver Arena.
The Swiss star, who next plays American Tennys Sandgren, said his plan was to keep going as far as he can to raise his fitness levels.
On the women's side, top seed Simona Halep successfully tested an injured ankle under match conditions, producing a 6-2, 6-2 defeat of Canadian Eugenie Bouchard.
An inspired Sandgren broke a struggling Wawrinka twice, in the sixth and eighth games of the first set, to go 6-2 up.