Ninth seed Keys and world No.6 Pegula's all-American showdown will kick off the action on Rod Laver Arena on Monday - with compatriots Amanda Anisimova, Taylor Fritz and Ben Shelton also in last-16 action.
While Pegula believes Keys is embracing her champion's tag at Melbourne Park, the title holder played it down.
"At this point, it's kind of become old news a little bit," Keys said.
"So definitely feeling a lot more comfortable. At this point just really trying to kind of keep my head down and just take care of my matches and worry about what's directly in front of me.
"Playing Jess is going to be really tough. She's obviously a very, very good tennis player and is just consistently going deep in every single tournament that she plays.
"So she's always someone that makes life very tricky being on the opposite side of her, but I'm looking forward to it."
To make the occasion even bigger, the pair recorded their usual 'Players Box' podcast together ahead of the match.
Pegula, who is chasing an elusive grand slam title after reaching the US Open final last year, lost to Keys in the 2025 Adelaide final and in the round-of-16 at Flushing Meadows in 2023.
"I need to kind of go back to the drawing board and look at some things I need to change," Pegula said.
"I do feel like I'm doing some things better this year in the last six months where hopefully I can use those tools, and it will help me when I play her in a couple days.
"I kind of need to figure out some things that I need to do different against her, because I've lost the last couple of times.Â
"She's the type of player, when she's on, she can beat anybody. We know that. I'm just going to have to use some of the tools I think that I've gotten better at, and hopefully they work. We'll see.
"But I'm excited for the challenge to hopefully turn that around."
Two of the three other feature matches on Rod Laver will also feature Americans.
Ninth seed Fritz will face Italian world No.5 Lorenzo Musetti as he aims to reach the quarter-finals at Melbourne Park for the second time in three years.
World No.8 Shelton has been upgraded to centre court for his match against Norway's Casper Ruud after 10-time Open champion Novak Djokovic was gifted a passage into the quarter finals.
Djokovic's hopes of an elusive and unprecedented 25th grand slam singles crown received a massive boost when his fourth-round opponent, Jakub Mensik, withdrew due to an abdominal injury.
The 38-year-old was set to be on Laver against Mensik, but organisers have shifted Shelton-Ruud in its place.
Before that match, popular Australian qualifier Maddison Inglis will seek to continue her fairytale, career-best run when she faces world No.2 Iga Swiatek.
Inglis received a third-round walkover when Japanese star Naomi Osaka pulled out due to injury.
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