World number one Williams was troubled by a nagging knee injury and retired when trailing 7-5, 2-1 to Australia's Jarmila Wolfe in the Hopman Cup.
Five-time Grand Slam winner Sharapova has withdrawn from the Brisbane International with an arm injury.
World number two Simona Halep has also pulled out with an inflamed Achilles.
The Australian Open begins on 18 January.
Williams, who will be bidding to retain her title in Melbourne, has a recurrence of a problem that sidelined her for much of the latter part of 2015. She had earlier withdrawn from the United States' opening Hopman Cup tie on Monday.
She trained again briefly on Tuesday and took to the court against Wolfe, but appeared very restricted in her movements especially on her left side.
The 34-year-old served for the first set, but was broken by Wolfe, who then took the set 7-5.
When Wolfe broke her again for a 2-1 lead in the second set, Williams called for the trainer and after a brief discussion retired.
However, Williams played down the injury and even refused to rule herself out of Thursday's Hopman Cup tie against the Czech Republic.
"I just have some inflammation that's been going away very slowly," she explained. "(It needs) a little rest, a little treatment."
Russian Sharapova, world ranked four, was hoping to defend her title in Brisbane in what was her only scheduled event before the Australian Open.
She said: "I hurt my forearm in practice a couple days ago and need to precautionary withdraw with the Australian Open starting soon."
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