Wilson took the first frame before Zhao bounced back to take the next four in a row.
The Englishman almost edged back into it after taking the next frame, only for his opponent to win the next two and secure a 6-2 triumph, with a break of 67 in the final frame.
Interestingly, all four matches at the 2026 Masters so far have finished 6-2, and the world champion will be the third Chinese player to reach the quarter-finals this year.
"I enjoyed the night. This is my second time at Alexandra Palace, so I really enjoyed it," said Zhao.
"I know (Wilson) is a very good player so I just wanted to have big breaks and didn't want him to come back.
"Hopefully in the final we have two Chinese players. Tonight I could see a lot of fans supporting me so I feel very confident and I didn't want to lose."
Zhao will face either world number five John Higgins or Barry Hawkins in the last eight, with the duo in action in Tuesday's evening session.
Allen overcomes food poisoning
Allen took the first frame before dropping the next two to Williams, only to go on and win the next five to book his spot in the last eight.
He hit the 687th century of his career during the match, clearing 125 to clinch his fourth frame and put himself on course for a comprehensive victory.
"The atmosphere here is second to none, it's always good to keep coming back," he told BBC Sport.
"I felt comfortable, which is weird. I couldn't prepare for this (event) at all; I was lying in bed all week with food poisoning.
"I just thought, go out and give it my best. I wouldn't have had much left had it gone much closer, so I'm glad I got over the line when I did."
Allen will face either world number one Judd Trump or China's Junhui Ding in the quarter-finals - the 11th time in his career that he has reached that stage of the competition.
He previously won the Masters in 2018 but has been unsuccessful in his subsequent attempts.
"I'm not getting carried away, an 11th quarter-final, but I've only won it once.
"I need to try and sort that out, and this is a good a week as any to try and do that."