Williams now pins her medal hopes on doubles. She was to play a second-round doubles match later with sister Venus. They won gold in doubles in Sydney.
The fourth-seeded Serena tried to rally from a 5-0 deficit in the final set against the No. 5-seeded Dementieva.
Williams overcame two match points during an 18-point game to hold for 5-3. But Dementieva held at love in the next game, sealing the victory when Williams pushed a volley wide.
