The Melbourne-born powerhouse, Wimbledon runner-up last year, blasted past the Croatian and will face either Hicham Arazi of Morocco or Spain's 26th seed Albert Costa in the last 16.
Philippoussis's victory puts the 10th seed into the fourth round at Melbourne Park for the fourth time since his debut 10 years ago.
"At the moment I'm feeling pretty good," the 27-year-old said. "I felt like every match I played at Wimbledon I got a little better -- hopefully that will happen here."
Philippoussis has long been accused by his detractors of failing to fulfil his enormous potential after reaching the final of the U.S. Open in 1998.
"I've been a late maturer. Everyone's a little different," Philippoussis said.
"As each year passes I get more comfortable with my game and know exactly how I want to play.
"Most importantly last year I had my first year where I played a full year and I wasn't injured.
"When you're healthy and you start getting in a rhythm of playing without being too injured it's easy to know what you want to do.
"I feel my game has gotten better and I've understood what kind of game I want to play."
Philippoussis, whose game is built around his giant serve, has been in great form, dropping just one set in the tournament.
A tall, powerfully-built player, Philippoussis prefers to finish his matches as quickly as possible despite being the central attraction in his home town.
"The good thing is that I've played three solid matches. I think it's very important to try and get the matches out of the way as quick as possible and spend as little time on the court as possible," he said.
"I've had incredible support here and that helps me through some tough moments.
"I don't feel at all pressured or anything like that. I just feel very lucky to be playing in Melbourne and getting the treatment that I have been getting."
