Isner, who had a first-round bye, was playing his first match since having to retire from his third-round match at the Australian Open against Stanislas Wawrinka because of a left foot injury.
The hard-serving American was broken early in the third set and unable to do much from there against Thompson, an Australian whom Isner had defeated in all three previous meetings. That included in last year's quarterfinals, the only time in three appearances in the tournament on Long Island that Isner won a match.
With No. 2 seed Milos Raonic losing a night earlier, defending champion Reilly Opelka is the highest-seeded player left in the tournament. The third-seeded American earned his first win of the season Thursday, beating Yoshihito Nishioka 6-4, 6-4.
Opelka, who had a first-round bye, broke Nishioka's serve in the final game of each set to earn his quarterfinal spot. He had dropped both matches on tour this season, blowing a two-set lead against Fabio Fognini in the Australian Open in the most recent one, and was on a five-match losing streak dating to October.