The British number three had posted back-to-back wins after arriving at the Rolex Paris Masters on an eight-match losing streak that stretched back to August.
But he came up against formidable opposition in Djokovic, with the 16-time grand slam winner coming through their third-round encounter in style, winning 7-6 (7) 6-1 for his 50th victory of 2019.
Edmund, whose ranking has crashed into the 70s, put up a fight in the first set and will still see this as a positive week as he hopes for a Davis Cup call from captain Leon Smith.
The 24-year-old hurt Djokovic with some fearsome forehand winners early on and saved two set points to send the opener to a tie-break.
He had to save four more in the decider, before the Serbian eventually got the job done to take the set and go in front, seemingly breaking the spirit of Edmund who crumbled in the second.
An early Djokovic break of serve to love set the tone and he powered through six successive games to book a last-16 meeting with Stefanos Tsitsipas.
Nadal moves into quarters
Rafael Nadal booked his place in his seventh Paris Masters quarter-final after sweeping past Stan Wawrinka in the French capital.
The 33-year-old Spaniard - who knows winning the tournament would secure his place as the year-end number one - broke Wawrinka once in each set for a 6-4 6-4 win.
Nadal will face Jo-Wilfried Tsonga in the last eight after the French veteran saved two match points to beat Germany's Jan-Lennard Struff 2-6 6-4 7-6 (6).
Struff led 6-4 in the decisive tie-break but Tsonga held his nerve and said he would relish his clash with Nadal.
Tsonga told media: "These matches make you improve - when you play the best, it's beneficial and it's not important whether you win or lose."
Grigor Dimitrov produced a superb performance to see off world number five Dominic Thiem 6-3 6-2 and book his place in the last eight.
The Bulgarian did not face a single break point as he dominated the Austrian, setting up a meeting with Chile's Cristian Garin, who saved three match points before seeing off French qualifier Jeremy Chardy 6-7 (4) 6-4 7-6 (6).
Denis Shapovalov beat Alexander Zverev 6-2 5-7 6-2 in a match featuring a remarkable 30 break points - five of which the Canadian converted to reach the quarter-finals.
