Latvia's Martins Plavins and Janis Smedins scored arguably the result of the day as they ended the involvement of the USA in the men's competition with a three-set win over Jacob Gibb and Sean Rosenthal.
On a rainy night in London, the Europeans pulled off a major upset as they reached the semi-finals at the expense of the team boasting the best record on beach volleyball's World Tour this year.
After being edged out in a tight opening set, Latvia responded superbly, taking the second before carrying the momentum into the decider on their way to a 19-21 21-18 15-11 win.
The defeat sees Gibb and Rosenthal follow compatriots Todd Rogers and Phil Dalhausser through the exit door after the reigning champions were dumped out by Italy in the last 16.
'It's unbelievable, I have no words to say,' said Plavins of Latvia. 'We are in the semi-finals and it is just unbelievable. We will try to get one win more but it will be very, very, very hard.'
We are in the semi-finals and it is just unbelievable.Martins Plavins
They will now face gold medal favourites Alison Cerutti and Emanuel Rego of Brazil in the last four, after the South Americans came through a major test of their title credentials to beat Poland in three sets.
The Polish pair of Grzegorz Fijalek and Mariusz Prudel came agonisingly close to pulling off a major upset and in a dramatic final set were just a point away from their first-ever win over the Brazilian duo.
The Poles brought up match point at 14-13 in the decider but they could not deliver the decisive blow, and Alison and Emanuel held on to complete a 21-17 16-21 17-15 victory.
Later in the evening, German duo Julius Brink and Jonas Reckermann stunned Brazil in the quarter-finals to end Ricardo Santos' bid for a fourth Olympic Games medal.
Santos arrived in London eyeing more success on the biggest stage after taking silver at Sydney 2000, gold at Athens 2004 and bronze in Beijing four years ago, but the 37-year-old's fire was extinguished as he and team-mate Pedro Cunha fell to defeat.
Germany, who came through the preliminary phase unbeaten, came out firing with Reckermann in particular a threat at the net.
The Europeans quickly built up an advantage and when Brink's brilliant one-handed dig and subsequent spike made it 13-6, they never looked in danger of losing the opener.
They won it 21-15 before Brink played his part again in the second to claim it 21-19.
In the late-night game, the Netherlands' Reinder Nummerdor and Rich Schuil completed the semi-final line-up with a straight-sets victory over Italy.
The all-European encounter came down to a masterclass in all aspects of the game by the Dutch, with Schuil dominant on both defence and attack at the net and Nummerdor superb in the back court as the pair eased to a 21-16 21-18 win.