The Scot lost 6-4, 6-4 to Richard Gasquet in his first singles match since January before saying he had turned down a wild card into the men's draw at the year's final Grand Slam.
Garbine Muguruza's preparations for next week's Australian Open were thrown into disarray when the world number three pulled out of the Sydney International with a thigh injury on Wednesday.
Cilic's booming serve lacked its usual accuracy and Germany's Kohlschreiber was able to control long rallies, pushing the towering Croatian around the court with pinpoint groundstrokes en route to a quick victory.
A misfiring Rafael Nadal had trouble hitting the mark but the third seeded Spaniard still had enough to beat American Donald Young 6-4, 6-2 on Tuesday and advance to the fourth round of the BNP Paribas Open.
A day after celebrating his 36th birthday, Federer played the aggressive game that has propelled him to five titles, including two grand slams, this year, attacking the net and rocketing second serves.
Rafa Nadal got his usual confidence boost from Nicolas Almagro at Roland Garros, reaching the third round with a 6-4, 6-3, 6-1 victory -- his fourth without dropping a set against his Spanish compatriot on the Paris clay.
Second seed Angelique Kerber stayed on track in her quest to unseat Serena Williams as world number one by beating Mirjana Lucic-Baroni of Croatia 6-2, 7-6(7) on Wednesday to reach the third round of the US Open.
Stanislas Wawrinka had to dig deep to beat Borna Coric at the Western & Southern Open in Cincinnati on Wednesday and conceded his thoughts had been far from tennis over the past few days.
India's Leander Paes and his German partner Alexander Zverev went down to the Spanish duo of Feliciano Lopez and Marc Lopez in a men's doubles first round match to bow out of the Cincinnati Open.
IMAGES from Day 4 of the Australian Open in Melbourne, on Thursday.
IMAGES of the all the action from Day 1 of the Australian Open played at Melbourne Park on Monday
Everton have been handed the dubious distinction of being the 'dirtiest' Premier League team after a study on the all-time cards and fouls by www.dirtyteams.co.uk.
Former world number one Andy Murray withdrew from the Brisbane International with a hip problem on Tuesday, further putting in doubt the Briton's prospects of being fit in time for the Australian Open later this month.
Second seed Garbine Muguruza, bidding to add the Wimbledon crown to her French Open title, was sensationally beaten in the second round on Thursday by Slovakian qualifier Jana Cepelova 6-3, 6-2 in the shock of the tournament so far.
Drysdale wins close single sculls gold Also, check out late gold medal winners from Day 7...
