Dominant world No 1 Djokovic, twice a champion in Shanghai, eased to a 6-2 6-3 victory to stay on track for a ninth title of the year having picked up his eighth last week in Beijing where he dropped only 18 games in five matches.
The Serb, who could face Murray in the semifinals, looks unbeatable, but warned there is still room for improvement.
"I still believe there are shots in my game that can be better. I think that's one of the things that keeps me going. It motivates me to play more," Djokovic told the ATP website.
Murray, playing his first tournament since helping Britain into the Davis Cup final last month, had to produce some of his best tennis in the face of 22 Isner aces.
The 28-year-old world number two finally preserved his perfect record against the American, winning 6-7(4) 6-4 6-4.
Murray managed a crucial break of serve at 5-4 in the second set and broke a tiring opponent in the seventh game of the final set on his way to victory.
"His serve is tough to read, obviously," Murray said.
"He has a great serve. It's hard to return in perfect conditions.
"So when the ball's coming in and out of the shade, and his ball toss, as well, it's difficult. When the sun went away, the court was in the shade, I found it easier to see the serve."
While Djokovic is beyond his reach in the rankings this year, Murray believes he can have a tilt at top spot next year.
"Obviously this year I have a good chance to finish at number two, which would be the first time for me," he said.
"This year, although I'm a long way behind Novak in the rankings, a few matches can change that significantly. Grand slam semifinals and finals, they're the matches that are for big, big points."
In the quarterfinals, Murray will meet fifth seed Tomas Berdych, who eased past Frenchman Gilles Simon 6-3 6-3.
Rafael Nadal, seeded eighth in Shanghai, continued his resurgence that saw him reach the Beijing final, moving through to a quarter-final clash with Stanislas Wawrinka.
Nadal beat Canada's Milos Raonic 6-3 7-6(3) while Swiss Wawrinka battled past Marin Cilic 7-5 6-7(7) 6-4 after an almost three hour slugfest.
Japan's Kei Nishikori, the sixth seed, was beaten 7-6(10) 7-6(3) by South Africa's Kevin Anderson who still has his eye on a place in the ATP World Tour Finals in London.
Anderson will face Frenchman Jo-Wilfried Tsonga next after he beat Roger Federer's Spanish conqueror Albert Ramos-Vinolas 6-7(5) 7-5 6-4.
