World number 26 Beaton won through to his first major quarter-final for over five years - since his run to the 2010 Grand Slam of Darts semi-finals - as he overcame number seven seed Michael Smith 11-7 with a classy display.
After Beaton took the opening two legs, Smith got off the mark with a brilliant 156 checkout, only to see his opponent then take out 160 to move 3-1 up in style.
Smith then took back-to-back legs to level and finished 129 to move ahead, but another surge from the 52-year-old saw him claim five successive legs to move 8-4 up.
Smith hit back to 8-7, but Beaton landed a 180 as he denied the youngster the chance to level before taking the next two legs to move into the last eight.
"It's a brilliant win," admitted Beaton. "I've not been in the quarter-finals for a long time on TV but I've been consistent in all the other tour events but I love darts and really enjoyed this game.
"The pace suited me as I'm a rhythm player. I go with the flow and it was like my first round match with Jelle - I put myself in a good position and capitalised at the end. Michael came back at me so well from 8-4 and it was a good game.
"I'll keep playing as long as I can keep competing and at the moment I am competing. As long as I can keep doing that I'll be annoying a few of them for a long time to come."
Beaton now meets World Champion Gary Anderson in Friday's quarter-finals, after the Scot overcame Terry Jenkins 11-5 to reach the last eight for only the second time in eight years in Blackpool.
After Jenkins took the opening leg, Anderson levelled with an 11-darter before moving 3-1 up, and though the two-time finalist hit back to trail just 5-4, a five-leg burst moved the Scot into an unassailable lead before he sealed victory with an 11-darter of his own.
"Terry's a class act and he has a good head on his shoulders," said Anderson. "He's been a thorn in my side for years so I'm pleased to get past him.
"The scoring isn't there yet and I'm not hitting enough 180s but my finishing is good and I'm quite happy with that.
"Steve Beaton's no mug and he knows how to handle these stages. It's going to be a good game and a hard game because he's a great lad and we'll get up there and get on with it."
King, meanwhile, won through to his first major quarter-final for almost 18 months, since the 2015 UK Open, by battling past Brendan Dolan 11-8 as he followed up his first round defeat of James Wade with another strong performance.
Rejuvenated Dolan - who knocked out Raymond van Barneveld in his opener - hit back from a 2-0 deficit early on, as King took out double 16 and 110, to move into a 4-2 lead, and he also led 5-4 before seeing the Norfolk ace take three in a row to move two legs up once again.
Dolan levelled at eight-all, but crucially King took out double 16 to regain the edge and punished missed doubles from the Northern Irish ace in the next two to secure the win.
"It wasn't the best I've ever played but that win is a great win," said King. "I put him under pressure, he gave me a chance and I took it, but he never goes away and is really tough to beat.
"It's seven years since I've been in the quarter-finals here so I'm pleased with that but I'll need to improve on that for the quarter-finals."
King will take on 15-time World Matchplay winner Phil Taylor in the last eight, after the Stoke legend brushed aside Mensur Suljovic 11-5.
The Austrian came back from 3-0 down to cut the gap to one leg, but a four-leg burst moved Taylor into a 7-2 lead, and though the Austrian took out 103 and 104 to respond to a 116 checkout from his opponent, the 55-year-old held on to seal the win with a 101 average.
"I'm over the moon," said Taylor. "He's a good player and if his confidence is up then he's very tough to beat. He's an unknown talent and a tough cookie but he tries his socks off.
"I missed a couple of shots and he did a couple of lovely finishes and he put me under pressure.
"I need to improve against Mervyn King and my finishing has to improve. I don't feel I've played well yet or felt comfortable, but Mervyn's a seasoned pro so you've got to play properly on Friday."
The quarter-finals commence on Thursday evening with the two games from the top half of the draw, with reigning champion Michael van Gerwen taking on Dave Chisnall and 2013 finalist Adrian Lewis up against number five seed Peter Wright.
Van Gerwen is the odds-on 5/6 favourite with sponsors BetVictor to retain his title on Sunday, with Anderson's odds cut to 3/1 and Taylor now 4/1 as he chases a 16th World Matchplay title.
Lewis and Wright are locked at 14/1, with Dave Chisnall a 25/1 chance to claim his first major title, with Beaton and King the 66/1 outsiders.
BetVictor World Matchplay
Wednesday July 20
Mervyn King 11-8 Brendan Dolan
Michael Smith 7-11 Steve Beaton
Phil Taylor 11-5 Mensur Suljovic
Gary Anderson 11-5 Terry Jenkins
Thursday July 21 (7pm-11pm)
Peter Wright v Adrian Lewis
Michael van Gerwen v Dave Chisnall
Friday July 22 (7pm-11pm)
Mervyn King v Phil Taylor
Gary Anderson v Steve Beaton
Quarter-Finals - Best of 31 legs
BetVictor World Matchplay
Quarter-Final Match Odds
10/11 Adrian Lewis v Peter Wright 10/11
1/8 Michael van Gerwen v Dave Chisnall 5/1
7/1 Mervyn King v Phil Taylor 1/12
7/1 Steve Beaton v Gary Anderson 1/12
5/6 Michael Van Gerwen
3/1 Gary Anderson
4/1 Phil Taylor
14/1 Adrian Lewis, Peter Wright
25/1 Dave Chisnall
66/1 Steve Beaton, Mervyn King
Odds courtesy www.betvictor.com and correct at time of writing. Subject to fluctuation.
Mervyn King v Brendan Dolan
1-0 - Dolan misses double 16 for a 104 finish, and King hits the same bed to break throw immediately.
2-0 - King's strong start continues with a 110 checkout.
2-1 - Double two gets Dolan off the mark.
2-2 - Dolan levels on double six.
2-3 - The Northern Irish ace hits the front on double eight.
2-4 - Dolan fires in a 180 to leave 24 before double 12 sees hi break throw.
3-4 - King opens with five treble 20s, hitting 180 and 140, before taking out 70 to break back.
4-4 - King levels on double eight as he punishes Dolan's misses.
4-5 - Dolan regains the lead.
5-5 - King responds to square a tight contest.
6-5 - King opens with a 180 before breaking to regain the lead on double 16.
7-5 - Double eight sees King regain a two-leg lead.
7-6 - Dolan punishes King's miss by finishing double 18.
8-6 - Double ten sees King regain his cushion.
8-7 - Tops sees Dolan respond.
8-8 - The Northern Irish ace levels by finishing 58 on double 18.
9-8 - Double 16 sees King break to move back ahead.
10-8 - A third-dart double four sees King move a leg away from the win.
11-8 - King lands a 180 before punishing Dolan's missed bullseye by finishing double ten.
Michael Smith v Steve Beaton
0-1 - Tops gives Beaton the opening leg.
0-2 - The former Lakeside Champion finishes 87 on double eight to break throw and double his lead.
1-2 - Smith takes out a brilliant 156 finish to claim his first leg.
1-3 - Beaton betters his opponent's effort from the previous leg with an outstanding 160 checkout.
2-3 - The flawless finishing from both players continues as Smith hits tops to respond.
3-3 - Smith levels by finishing 52.
4-3 - Smith wins his third successive leg in style, hitting a 177 score before finishing 129 to move ahead for the first time.
4-4 - Beaton hits back to level.
4-5 - Double ten sees Beaton move back in front.
4-6 - Beaton scores 168 to leave 16 before pinning double eight to open up a two-leg lead.
4-7 - The game's first two 180s arrive as both players hit maximums before Beaton finishes 100 to win a fourth straight leg.
4-8 - Beaton's charge continues as he lands a 180 and finishes 66 on double 18.
5-8 - Smith lands a 180 and double ento win his first leg in six.
6-8 - Smith fires in another maximum before finishing tops to hit back.
7-8 - Double ten sees Smith break throw to cut the gap to one leg with his third successive leg.
7-9 - Beaton denies his rival a chance to level, hitting a maximum and double 16 to edge away,
7-10 - Beaton finishes 70 on double eight to move a leg away from the win.
7-11 - Another 180 is followed by double 16 as Beaton moves into his first major quarter-final since the 2010 Grand Slam of Darts.
Phil Taylor v Mensur Suljovic
1-0 - Double eight gives Taylor the opening leg.
2-0 - Taylor breaks throw by finishing 62 on tops.
3-0 - Suljovic lands a 177, but Taylor's strong start continues as he lands double 16.
3-1 - The Austrian hits back on double ten to win his first leg.
3-2 - Suljovic lands a 180 before punishing two misses at tops from Taylor with a third-dart double nine to cut the gap to one leg.
4-2 - Tops sees Taylor restore breathing space.
5-2 - Taylor takes out 65 on tops.
6-2 - Taylor breaks throw again, opening with a 180 before finishing 82 on tops.
7-2 - Taylor claims a fourth successive leg, hitting a second 180 before landing double 16.
7-3 - Suljovic responds to win his first leg in five on double 14.
8-3 - Taylor finishes 116 on tops to regain a five-leg cushion.
8-4 - The Austrian finishes 103 on double 14 to hit back.
9-4 - Suljovic lands a third 180, but misses two darts at double 12 to allow Taylor in, with a third-dart double six finish moving the 15-time champion two legs away from victory.
9-5 - Suljovic finishes 104 on double 12 to hold throw once more.
10-5 - Taylor hits a 180 and double 16 to move a leg away from the quarter-finals.
11-5 - Taylor fires in a 180, and when Suljovic misses a dart at double 16 the 15-time champion takes out 68 on double four to seal the win.
Gary Anderson v Terry Jenkins
0-1 - Jenkins holds throw to win the opening leg on double 18.
1-1 - Anderson fires in two 180s in an 11-darter to level on tops.
2-1 - The World Champion breaks throw on double 16.
3-1 - Jenkins fires in a 177 to leave 24, but Anderson hits double ten to win a third successive leg.
3-2 - Anderson lands a 180, but is unable to prevent Jenkins cutting the gap once again by finishing a 14-darter on tops.
4-2 - Anderson finishes 80 to regain breathing space.
4-3 - Jenkins again hits back.
5-3 - Anderson opens with 140 and 180 before taking out 46.
5-4 - Tops sees Jenkins respond with a 14-darter.
6-4 - Anderson replies on tops to move two legs clear again.
7-4 - Anderson takes out 44 on tops.
8-4 - Double ten gives Anderson a third straight leg.
9-4 - Jenkins lands a 180, but Anderson claws his way back into the leg before finishing 56.
10-4 - Anderson wins his fifth straight leg to move to the brink of victory, hitting another 14-dart leg.
10-5 - Tops sees Jenkins keep his hopes alive.
11-5 - Anderson seals victory in style with an 11-dart leg.