Canada's Raonic blasted in 14 aces and landed 71 per cent of his first serves as he used his service game to great effect – Karlovic did not earn any break points as he bowed out in an hour and a half.
The Canadian faces Jarkko Nieminen of Finland for a place in the semis.
"I was a little hesitant in the first set, just trying to figure out what I was going to do," said Raonic.
"It’s going to be very different from today [against Nieminen], but if I take the focus and intensity from today, I think I will have my opportunities and I think I will be able to create a lot of opportunities."
Second seed Richard Gasquet came from a set and a break down to Grigor Dimitrov to win 5-7 7-5 6-4 in two hours and 15 minutes.
Young Bulgarian Dimitrov fired in 21 aces but the gifted French technician used his fine array of groundstrokes to eke out an impressive victory.
Gasquet faces Bernard Tomic next after the eighth seed came from a set down to beat Israel's Dudi Sela 4-6 6-3 6-4. The Australian saved 11 of the 13 break points he faced to win in two hours and 22 minutes.
"He played pretty good," said Tomic. "I didn’t play aggressive enough, but it’s difficult to play aggressive against a player like that.
"He plays very, very different tennis, like me, slicing a lot, so it’s not comfortable to play against."
Fourth seed Gilles Simon reached the last eight with a 6-4 6-4 victory over Japan’s Go Soeda.
Simon, winner in Bangkok in 2009, will face compatriot Gael Monfils in the last eight after he beat the sixth seed, Serbia's Viktor Troicki, 7-5 7-5.
Monfils has slipped to 45th in the world rankings after four months out injured, but he is a former world number seven and was arguably the favourite against Troicki.
Fifth seed Fernando Verdasco - a semi-finalist in Bangkok in 2007 - beat world number 124 Donald Young 7-5 6-4 in one hour and 39 minutes to set up a meeting with top seed Janko Tipsarevic in the quarter-final.
Tipsarevic secured his passage to the quarter-finals with a 6-4 6-4 victory over Hirokli Moriya on Wednesday.