There will be a new women's singles champion at the National Bank Open.

Two-time reigning champion Jessica Pegula of the United States is out in the third round after falling to Latvia's Anastasija Sevastova 3-6, 6-4, 6-1 in a major upset Friday afternoon at the WTA 1000 tournament.

The 35-year-old Sevastova reached a career-high ranking of No. 11 in 2018, but now sits at 386th.

She rallied from a set down and broke the third-seeded — and world No. 4 — Pegula six times on 10 chances.

The loss continues a poor run of form for Pegula, who won her opener in Montreal over Maria Sakkari of Greece, but exited Wimbledon and the D.C. Open after one match in July.

Sevastova will take on Japan's Naomi Osaka, who moved on to the fourth round with a 6-2, 6-4 win over 22nd-seeded Jelena Ostapenko of Latvia.

Osaka, a former world No. 1, hit five aces and converted six of nine breakpoint opportunities, taking the match in 72 minutes on IGA Stadium's centre court.

In other daytime results, 16th-seeded Clara Tauson of Denmark rolled to a 6-3, 6-0 third-round victory against Ukraine's Yuliia Starodubtseva.

Wimbledon champion Iga Swiatek, the tournament's second seed, headlined the night session. She was scheduled to face Eva Lys of Germany in third-round action.

Victoria Mboko was the only Canadian — singles or doubles — remaining in Montreal. The 18-year-old rising star from Toronto is set for a marquee fourth-round matchup Saturday against top seed Coco Gauff of the United States.

Mboko rallied from down a set to defeat Czechia's Marie Bouzkova 1-6, 6-3, 6-0 on Thursday.

This year's National Bank Open debuted a revamped 12-day, 96-player format, with the top 32 seeds receiving byes to the second round. The tournament's final is scheduled for Thursday.

Diallo falls to Fritz in Toronto

Canada's singles hopes were dashed when Montreal's Gabriel Diallo dropped a 6-4, 6-2 decision to Taylor Fritz in Toronto.

The second-seeded American secured early service breaks in each set and closed out the victory in one hour 15 minutes.

Diallo, the No. 27 seed, was the last Canadian left in the 96-man singles draw. The other seeded Canadians — Montreal's Felix Auger-Aliassime (No. 21) and Denis Shapovalov (No. 22) of Richmond Hill, Ont. — lost their opening matches earlier in the week.

Fritz was more consistent and played a steadier game than the 23-year-old Diallo, who recently won his first ATP Tour event in 's-Hertogenbosch, the Netherlands.

Diallo couldn't find his rhythm on a cool, comfortable evening at Sobeys Stadium. He sprayed shots at inopportune times, his net play seemed off and the unforced errors caught up to him.

Fritz, who won a five-set battle when they played at Wimbledon a month ago, seemed content to let Diallo keep making mistakes rather than outpower him.

The Centre Court crowd did its best to support Diallo, but he was unable to generate much energy in the venue. Another service break came in the seventh game of the second set and Fritz served it out for the victory.

The American will face Jiri Lehecka in the fourth round. The Czech posted a 3-6, 6-3, 6-4 win over Arthur Fils of France earlier in the day.

Other third-round winners included 20th-seeded Alejandro Davidovich Fokina of Spain, 13th-seeded Italian Flavio Cobolli, seventh-seeded American Frances Tiafoe and sixth-seeded Russian Andrey Rublev.

Fourth-ranked Ben Shelton was scheduled to play fellow American Brandon Nakashima in the feature night match.

In doubles play, Sander Arends of the Netherlands and Argentina's Guido Andreozzi needed just 52 minutes to post a 6-0, 6-3 win over the wild-card duo of Nicolas Arsenault of Richmond Hill, Ont., and Vancouver's Justin Boulais.

Arends and Andreozzi will next face Liam Draxl of Newmarket, Ont., and Calgary's Cleeve Harper.

Play continues through Thursday at the US$9.19-million tournament.