Youzhny was the second former winner of the clay-court event to be eliminated after two-time champion Nikolay Davydenko lost on Monday. Youzhny was the 2010 winner.
Wild-card entry Gael Monfils of France topped eighth-seeded Jurgen Melzer of Austria 6-3, 6-3.
Fifth-seeded Alexandr Dolgopolov defeated Ukrainian countryman Sergiy Stakhovsky 6-4, 6-2. Sixth-seeded Florian Mayer of Germany, the 2011 runner-up, struggled to overcome qualifier Lukasz Kubot of Poland 7-6 (2), 4-6, 7-5.