Holders Real Betis crashed out of the Copa del Rey in the last 16 on Wednesday after losing 4-2 on penalties to Osasuna despite twice leading in a tie that finished 2-2 after extra time.
Portugal midfielder William Carvalho put Betis ahead at home just past the hour but Osasuna forced an additional 30 minutes when David Garcia equalised in stoppage time.
Betis went back in front through Youssouf Sabaly but Ruben Garcia levelled before Sergio Canales and Guido Rodriguez both missed for Manuel Pellegrini's side in the shootout.
Alvaro Morata struck before Marcos Llorente added a late second as Atletico beat second-tier Levante 2-0, providing Diego Simeone's team some respite from their stumbling run in LaLiga.
Edinson Cavani scored twice as last year's runners-up Valencia strolled to a 4-0 win at second-division Gijon. Justin Kluivert and Samuel Lino were also on target for the visitors.
Athletic Bilbao won 1-0 at home to Espanyol courtesy of a strike from veteran defender Oscar de Marcos.
Barcelona, the record 31-time winners, take on third-tier Ceuta on the coast of North Africa on Thursday, while Real Madrid go to Villarreal.
The quarterfinal draw takes place on Friday with the ties scheduled for January 24-26.