Serena Williams let victory slip from her grasp but gained plenty in defeat at the Eastbourne grasscourt tournament on Wednesday while sister Venus continued her winning return after a five-month injury layoff.
Serena, out for almost a year during which she battled a life-threatening condition, lost 3-6, 7-6, 7-5 to top-seeded Russian Vera Zvonareva, who she beat to win Wimbledon last July days before gashing her foot on glass in a Munich restaurant.
That injury needed two operations and eventually led to her suffering life-threatening blood clots in her lungs.
In an earlier battle of former world No.1's Venus beat Ana Ivanovic of Serbia 6-3, 6-2 in just over an hour to reach the quarter-finals in her bid to regain strength and fitness for Wimbledon which starts next week.
The American, a five-times Wimbledon singles champion, had been sidelined for five months with abdominal and hip injuries and like her sister was using Eastbourne as a Wimbledon warm-up.
Serena, the four-times Wimbledon title holder, seemed to be heading for victory after taking the first set and needing just two points on her own serve to take the second 6-3 as well.
However, she was broken, allowing Zvonareva back into the match and the Russian recovered to win the second set tiebreak as Serena battled to find some consistency.
The match then went into an astonishing final set in which the American rediscovered her energy, battling to stay in the contest before Zvonareva won after three hours 12 minutes.
Zvonareva said in a courtside interview: "She's done an unbelievable job coming back after one year not playing and now spending over three hours on court and playing some unbelievable tennis. She's a great champion and a lot of respect to her."
Serena will be seeded seventh and Venus 23rd at Wimbledon.
Venus, asked how she felt about her second-round win over world number 18 Ivanovic, told reporters: "Obviously, it's great, no breaks of serve. That's ideal for me in the match.
"To get a double break at the end just feels awesome. I was really happy to have those clean service games and not a lot of errors.
"I was just hoping not to be injured, honestly. The first match was definitely kind of nerve wracking, hoping to come off the court on two legs.
"That was the first goal. Then to win a match is the ultimate goal. Just to have the opportunity to play another match is a great start."
She had marked her return with a creditable 7-5, 5-7, 6-3 victory over Germany's Andrea Petkovic on Monday and looked sharper on Wednesday, earning four service breaks.
Earlier, third seed Victoria Azarenka of Belarus beat Briton Elena Baltacha 6-1, 7-6, Czech fifth seed Petra Kvitova defeated holder Ekaterina Makarova 7-6, 7-6 and Agnieszka Radwanska of Poland beat Italian fourth seed Francesca Schiavone 6-3, 6-2.