(CNN) -- Nick Watney sent former world No. 1 Tiger Woods packing in the second round of the WGC Match Play Championship in Arizona Thursday.
Woods, who had to battle in his first-round win over Spain's Gonzalo Fernandez-Castano, again took the match against his fellow American to the final hole.
Trailing one down, the 14-time major champion hit a superb approach to within 10 feet of the hole. Needing the putt to take the match to the 19th, Woods pushed it wide to hand his opponent victory.
"I've blocked my putts all day and I blocked that one. I didn't make any putts today and, subsequently, I didn't win the match," Woods said after his bid for a fourth title in the 64-man event ended early.
"I didn't miss a single shot coming in, which is good. And that was fun, to hit the ball that well. Unfortunately, I just didn't make a putt when I needed it."
Woods is still seeking his first win in a PGA Tour event since 2009, but has shown signs of a return to his best form since the start of the year.
"We don't see him miss putts like that very often," said Watney, who next faces world No. 3 Lee Westwood. "And there were a few of them."
Westwood beat fellow former European No. 1 Robert Karlsson of Sweden 3 and 2, but has lost to the American for the past two years Arizona.
He can take the No. 1 ranking from fellow Englishman Luke Donald, beaten by Ernie Els in the first round, with victory come Sunday.
Westwood won four of the first six holes but had to hold off a late rally from his opponent before booking a last-16 place.
World No. 2 Rory McIlroy of Northern Ireland also has his eyes on the top spot, and progressed comfortably with a 4 and 2 win over Anders Hansen of Denmark.
The U.S. Open champion will next take on Spanish veteran Miguel Angel Jimenez, who beat in-form U.S. PGA Championship titleholder Keegan Bradley 2 and 1.
Scottish pair Paul Lawrie and Martin Laird will play each other in the last 16 after more excellent play.
Former British Open champion Lawrie followed up his first-round victory over England's Justin Rose by edging out 20-year-old Japanese star Ryo Ishikawa on the final green.
Laird carded eight birdies against 18-year-old Italian Matteo Manassero on his way to a 2 and 1 victory.
American Dustin Johnson had to battle back from three down to beat Ryder Cup teammate Jim Furyk in the first round, but enjoyed a 7 and 5 romp over Italian Francesco Molinari for the biggest win of the week so far.
Johnson, seeded ninth, will next play 40th-ranked compatriot Mark Wilson -- who won 3 and 2 against England's Robert Rock, winner of January's Abu Dhabi event where Woods made his season debut and tied for third.
Another home hope, Steve Stricker, winner of the tournament in Australia in 2001, sank a 20-foot birdie putt on the last to see off former British Open champion Louis Oosthuizen of South Africa.
The 44-year-old world No. 5 will next face 21st-seeded compatriot Hunter Mahan, who thrashed former PGA Championship winner Y.E. Yang of South Korea 5 and 3.
Els, having routed Donald 5 and 4, lost by the same score to Swede Peter Hanson and is facing an uphill battle to qualify for the Masters in April.
Hanson, seeded 33rd, will take on Brandt Snedeker, who beat fellow American Kyle Stanley 2 & 1.