Pospisil was overcome with emotion after he came out on top of a tight match with fifth-seeded Tomas Berdych to win 7-5, 2-6, 7-6 (5) before a roaring crowd of supporters on Thursday at the US$3.49-million hardcourt tournament.
Raonic, meanwhile, didn't even break a smile after an ill-tempered 7-5, 6-4 win over sixth-seeded Juan Martin Del Potro, the Argentine veteran who was coming off a victory last week in Washington.
The wins over players ranked in the world's top-10 put two Canadians in the quarter-finals of Canada's biggest tournament for the first time since Andrew Sznajder and Grant Connell made it in 1989.
If one wins, he will be the first Canadian in the semifinals since Mike Belkin in 1969. The last Canadian to win the tournament, then called the Canadian Open, was Robert Bedard in 1958.
But if both win, they will face each other in the semifinals on Saturday.
"It's great," said Raonic. "I'm happy to have gone through.
"I was able to watch a lot of Vasek's match. He seemed to be playing confident and well. It was big he battled out the ending of that match. It's good for him."
While Canadians revelled in the home court support, it was a tough day for top players other than fourth-seeded Rafael Nadal, who downed Jerzy Janowicz 6-4, 6-4. He next plays qualifier Marinko Matosevic, who outlasted Benoit Paire 7-6 (7), 6-7 (10), 6-3.
Murray was knocked out of his first tournament since his stirring Wimbledon title with a 6-4, 6-3 loss to unheralded Ernests Gulbis, who will play Raonic in the quarter-finals on Friday.
Djokovic needed to work hard for his 2-6, 6-4, 6-4 victory over Denis Istomin of Uzbekistan, which stretched his Rogers Cup winning streak to 12.
The Serb has a quarter-final meeting with Richard Gasquet, who ousted ninth-seeded Kei Nishikori 1-6, 6-3, 6-3.
Pospisil will play Nikolay Davidenko, who beat fellow Russian Alex Bogomolov 6-4, 6-3.
Raonic needed courtside treatment for an inflamed muscle that was pinching a nerve in his neck and causing a "dead feeling" in his right arm. He was down for about 10 minutes, but got up and played, although he winced in pain on some shots.
He hopes it will feel better after a night's sleep and he expects to be able to finish the tournament.
"Tomorrow's another day," Raonic said. "I could sleep well and it could be something really good, or I could have a bad sleep."
Del Potro was not happy when Raonic touched the net with his hand on break point in the eight game of the second set and didn't call the foul on himself after the umpire missed it. He stood for a long moment staring up at the umpire's chair.
Raonic said it was too important of a point to call a foul on himself, adding that the neither player was in top form.
"I think both of us were not 100 per cent," the Thornhill, Ont., product said after his first win of the year against a top-10 player. "Obviously he was also far from that.
"I sort of stuck to it, played aggressive and just tried keeping points short. He was a little bit limited from what I could tell on his rotation. He wasn't able to pass as well as he normally would, or serve as well."
The 11-seeded Raonic reached the quarter-finals for a second year in a row.
Pospisil was thrilled with his first-ever win against a top-10 player.
After Berdych hit wide on match point, the 23-year-old flung his hat on the ground and held his head in happy disbelief. The crowd packed into the National Bank court seats saluted the win with the "Ole Ole" song usually reserved for the NHL's Montreal Canadiens.
"That was the best match in terms of atmosphere at the end that I've ever played," said Pospisil. "That and the doubles in Davis Cup (a win over Italy this year) were pretty even in terms of atmosphere.
"They were both amazing. But that was definitely the most emotional ending and best match of my career, without a doubt. If I can keep playing the way I am now, at least I'll give myself an opportunity."
The six-foot-four native of Vernon, B.C., is coming off a win last week in a Challenger series event in Vancouver.
Nadal improved to 45-3 this year — best on the ATP Tour —with his win over six-foot-eight Janowicz.
He is 7-0 on hardcourts this year. The Spaniard has seven tournament wins this year, including his only previous hardcourt event at Indian Wells.
The centre court stands looked half empty during Murray's listless loss to Gulbis, who he had beaten all five of their previous meetings. Many of the fans had gone to the adjoining National Bank court to watch Pospisil.
Murray was in his first tournament since becoming the first British man to win Wimbledon in 77 years. He looked sharp beating Marcel Granollers in his opening match Wednesday
"I actually hit the ball better today than I did yesterday," said Murray. "I just got broken at the end of both sets.
"There are obviously some things for me to work on, but I think that will come with playing matches."
Gulbis said his previous losses to Murray were ancient history.
"I looked on this monitor that I lost to him five times, but honestly I just remember the last match we played in Cincinnati," said Gulbis. "It was a really tough match, but it was in 2010.
"It was a really long time ago. I was a different person, he was a different player. When I play against Nadal, honestly I don't care that I lost to him six or seven times. Every match is like a new thing. Let's delete all the past. Let's start from zero. So I'm 1-0 with Murray."
In the first match of the day on centre court, Janowicz used a service break to take a 6-5 lead, but Nadal broke back with a sweet cross-court return on game point. He trailed 5-2 in the tiebreak and won that as well.
Janowicz, a semifinalist at Wimbledon, won the first three games of the second set, only to see Nadal fight back again, break service for a 5-4 lead and then serve out the match.
Nadal said Janowicz has the tools to become a top-5 player on tour.
"I had a very good victory today against a very difficult opponent," said Nadal. "I did a few things well during the match, a few things that I need to improve a little bit more.
"His serve is huge. His forehand and backhand can be very dangerous. When he plays with a little bit of regular shots, he will become a very difficult player to beat. If he is able to maintain the right level during whole match he will be a player that will be in the very top positions."
After ousting Canadian Frank Dancevic in the second round, Janowicz felt he could've given Nadal more of a battle had he served better.
"Actually I'm upset a little bit," he said. "I'm still quite happy I was able to get three matches here."
"That's most important for me, to get as many matches as possible before the U.S. Open.
Nadal won the Rogers Cup in 2005, his first hardcourt victory, and in 2008.
Bosnian-born Australian Matosevic celebrated his 28th birthday with his win over Paire.
"Unbelievable match," said Matosevic, who caught a break in the second round when his 10th-seeded opponent Tommy Haas retired with a shoulder injury. "I knew it would be a special win on my birthday."
But up next is Nadal, who beat Matosevic 6-1, 6-2 on clay in Monte Carlo this year.
"I'm not happy about that after playing two-and-a-half hours," said Matosevic. "I'm sure he'll make me run."
Matosevic also reached the quarter-finals last week in Washington, where he beat Raonic in the third round before losing to Dmitry Tursunov.