The big-serving Cilic had only once before lost to a player ranked as low as Pella at Wimbledon.
Former champions Rafael Nadal and Novak Djokovic battled into the Wimbledon third round on Thursday but third seed and 2017 runner-up Marin Cilic crashed out.
World No. 1 Nadal defeated Mikhail Kukushkin of Kazakhstan 6-4, 6-3, 6-4 and will next face Australian teenager Alex de Minaur.
Djokovic, the three-time champion, needed treatment on his left thigh on Court Two but still had too many weapons for Argentina’s Horacio Zeballos, winning 6-1, 6-2, 6-3.
Djokovic has now made the third round for 10 consecutive years.
Cilic blew a two-set lead in his 3-6, 1-6, 6-4, 7-6(3), 7-5 loss to Argentina’s Guido Pella, ranked 82.
When rain forced the tie to be postponed on Wednesday, Cilic was leading by two sets against an opponent who had never won a match at Wimbledon before this year.
But the Croatian collapsed once the match resumed on Court One on Thursday and Pella took full advantage to set up a third round clash with Mackenzie McDonald.
Cilic, the 2014 US Open champion, had been expected to mount a strong challenge for the Wimbledon title after winning the grass-court warm-up at Queen’s Club two weeks ago.
But his defeat is good news for defending champion Roger Federer, who was on course to face Cilic in the semifinals.
“Yesterday he was playing so good, hitting the ball so hard that I couldn’t do anything,” Pella said.
“So the rain helped me a lot. Today I played differently, tried to be more aggressive, he started to feel uncomfortable.
“I tried to hit the ball hard and fight for every ball and I think in the end that’s why I won.”
Nadal, the 2008 and 2010 champion, was tested by World No. 77 Kukushkin, a player who is coached by his wife.
The Kazakhstani was made to pay for converting just two of 13 break points in the match.
“It was very tough because he played very well,” said 11-time French Open champion Nadal, who is chasing an 18th Major.
“On grass, the ball bounces really low so it was a good test.
“I knew it was going to be a tough match, so I went onto the court with the determination and intensity, thinking I can’t make any mistakes.”
For Djokovic, meanwhile, victory was his 60th at Wimbledon — making him just the fifth man to claim 60 wins at the All England Club in the Open Era.
Djokovic hit 15 aces and 31 winners in a commanding win over 33-year-old Zeballos, who was a top 40 player in 2013 but was playing at Wimbledon ranked a lowly 126.
Three-time major winner Stan Wawrinka was unable to follow up his first round defeat of sixth seed Grigor Dimitrov when he lost 7-6(7), 6-3, 7-6(6) to Italian qualifier Thomas Fabbiano.
The World No. 133 is in the third round for the first time after winning back-to-back matches on the main tour for only the second time in 2018.
John Isner, the US ninth seed, saved two match points, fired 64 aces and 88 winners to defeat Belgian qualifier Ruben Bemelmans 6-1, 6-4, 6-7 (6/8), 6-7 (3/7), 7-5.
Nick Kyrgios, seeded 15, unleashed 42 winners to see off Robin Haase of the Netherlands 6-3, 6-4, 7-5.
Kyrgios could next face lucky loser Bernard Tomic if his Australian compatriot can shock Japan’s Kei Nishikori.
Australian 17th seed Ashleigh Barty reached the third round for the first time with a 6-4, 7-5 win over fellow former Wimbledon junior champion Eugenie Bouchard.
Barty came back from 2-5 down in the second set to see off 2014 runner-up Bouchard who came through qualifying this year.
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