The Milton potter and 2004 UK champion sprung a major upset by dumping out his compatriot and defending champion Higgins with a fine 6-4 win at the York Barbican Centre.
Maguire has failed to live up to his top billing since the triumph seven years ago.
However, victory over his good mate and regular practice partner Higgins has given him the inspiration to finally scale the heights he has so often threatened to do.
"I was lucky to get over the line. John came back at me and I feared the worst to be honest," reflected Maguire. "If he'd got that black in the 10th frame it was odds-on he would win the match.
"I didn't know what I was doing out there. I was 5-1 up and wanted to win 6-1. He has come back and won against me so many times, so I was just delighted I clung on to win."
Higgins admitted: "It was only Stephen's mistakes that let me in. I did nothing special.
"He made mistakes in the last few frames but I played very poorly. He did not have to be at the top of his game to beat me."
Earlier, Ronnie O'Sullivan admitted he could quit the game to find love.
O'Sullivan bowed out of the championship yesterday after a 6-5 defeat to Judd Trump and following his last 16 loss, the three-time world champion admitted settling down away from the green baize is his priority.
"I want to share my life with someone, I don't want to be living on my own and I don't want to be travelling around the world on my own feeling anxious and lonely," he revealed.
Neil Robertson beat Larkhall's former world champion Graeme Dott 6-3, while Ding Junhui also booked his last eight place with a 6-5 win over Matthew Stevens.