Federer's second-round loss at Wimbledon, a year after taking the title, drops him from being the third ranked men's tennis player in the world.
He was fifth in the rankings of June 23, 2003, two weeks before he won Wimbledon for the first of his record 17 major championships.
Wimbledon champion Andy Murray remains at No. 2 on Monday, behind the runner-up, Novak Djokovic.
Quarter-finalist David Ferrer rises one spot to a career-high No. 3, with Rafael Nadal up one place as well to fourth.
Marion Bartoli, who won Wimbledon for her first Grand Slam title, moves from No. 15 to No. 7 in the WTA rankings.
Serena Williams stays at No. 1 despite her fourth-round loss at Wimbledon.