Former champion Jelena Ostapenko reached the third round by beating second-seeded Karolina Pliskova 6-4, 6-2.
Former top-ranked player Karolina Pliskova reached the semis at Roland Garros in 2017 and next faces Jelena Ostapenko.
World number two Halep, 28, was competing in her third Rome WTA final, having finished runner-up in 2017 and 2018 on the clay at the Foro Italico.
World no 3 Pliskova ascended to the top spot in the draw -- and by Day 3, she was gone.
Djokovic has been drawn on the top line of the men's bracket, sharing the first quarter with No. 6 seed David Goffin, who will play Reilly Opelka in his first-round match.
Defeat for Halep means that Karolina Pliskova, at number seven, is the only women's top 10 seed to reach the fourth round.
Hsieh Su-Wei, who reached a career singles high ranking of 23 in 2013, welcomed the shake-up at the top of the sport.
Five-time champ Venus Williams became the latest star to crash out in a 6-2, 6-7 (5/7), 8-6 defeat against Kiki Bertens.
Replays showed the ball landed inside the sideline but umpire Marta Mrozinska refused to accept Pliskova's arguments to overturn the call.
Former world number one Karolina Pliskova held on to sixth place in the world rankings after her victory in the Stuttgart Grand Prix tournament.
There were no changes in this week's top 10, as Denmark's Wozniacki held the third position, followed by Czech Karolina Pliskova.
Pliskova launched her bid for a season-ending triumph at the WTA Finals with a convincing 6-2, 6-2 victory over Venus.
Romanian tennis player Simona Halep continued to lead the Women's Tennis Association rankings released.
World number two Simona Halep was booted out of the Wuhan Open 6-2, 6-1 by Russia's Daria Kasatkina on Tuesday.
Pliskova ill now face crowd favourite, Wang Qiang, the first ever Chinese player to reach the third round at Wuhan.