Brazil's stars shone at Old Trafford as they picked up a second win and secured a quarter-final berth, while world and European champions Spain saw their Olympic dream die after suffering back-to-back defeats.
Elsewhere, Team GB are up and running, Mexico celebrated their first three-point haul, Senegal stunned Uruguay and Egypt and New Zealand cancelled each other out.
Neymar underlined his status as one of the hottest prospects in world football by scoring a breathtaking free-kick to kill off spirited Belarus and help Brazil to a 3-1 success.
This week Barcelona made it clear they want Neymar to join them after the Olympics and it is easy to see why.
His dazzling skills wowed all 66,212 spectators throughout an entertaining Group C match, with the crowning glory coming in the 65th minute when the 20-year-old bent a peach of a set-piece over the wall and past the sprawling Aleksandr Gutor.
Brazil have now qualified for the last eight with one match to spare, but they were given a stern test by Belarus, who opened the scoring through Renan Bardini Bressan.
Neymar crossed for Alexandre Pato to equalise and also set up Oscar for Brazil's third after his brilliant effort had put them ahead.
Earlier in the day at Old Trafford, in another Group C encounter, Egypt's hopes of qualifying for the last eight took a blow as they drew 1-1 with New Zealand after wasting several chances.
Egypt fell behind to a 16th minute strike from West Brom's Chris Wood, but Mohamed Salah equalised from close-range at the end of the first half.
The Africans could have had at least seven goals by the final whistle but a mixture of last-ditch Kiwi defending, and some awful finishing from Egypt, meant they had to settle for a draw in what was a poor-quality contest.
Striker Jerry Bengtson dumped Spain out of the Olympics as Honduras pulled off a major shock at St James' Park.
The 25-year-old's seventh-minute header, his third goal in two games, ensured that the Spaniards, whose senior team are reigning World and European champions, will go home early following an opening defeat by Group D leaders Japan.
Kensuke Nagai fired Japan to the brink of the Olympic quarter-finals with a late winner against Morocco.
The Grampus Eight frontman struck with an instinctive lob six minutes from time to settle a tight Group D encounter.
Ten-man Senegal blew Group A wide open with a shock win over highly-fancied Uruguay at Wembley.
Impressive teenager Moussa Konate scored twice, either side of Abdoulaye Ba's first-half dismissal.
And in a match littered with fouls - and five more yellow cards - Senegal kept the World Cup semi-finalists at arms' length, with Luis Suarez coming closest when he headed into the side netting.
Team GB need only a point to book their safe passage into the knockout stages after grinding out a 3-1 victory over the United Arab Emirates at Wembley.
Ryan Giggs nodded Stuart Pearce's side into a first-half lead, but that advantage was cancelled out by Rashed Eisa.
Two substitutions turned the tie in Britain's favour, with Scott Sinclair and Daniel Sturridge stepping off the bench to wrap up a much-needed win.
Tottenham playmaker Giovani dos Santos was Mexico's hero with both goals in their Group B clash with Gabon at the City of Coventry Stadium.
Giovani, who struggled to earn a place under Harry Redknapp at White Hart Lane, was introduced as a second-half substitute and broke the deadlock after 63 minutes.
He then scored from the penalty spot in injury-time after Gabon defender Henri Ndong was sent off for a professional foul.
Kim Bo-kyung grabbed a second-half winner for South Korea as they beat Switzerland in their Group B encounter at the City of Coventry Stadium.
Kim, who recently moved from Cerezo Osaka to Championship club Cardiff, volleyed home a deflected cross to move Korea level on four points with group leaders Mexico.
Arsenal's Park Chu-young had opened the scoring for Korea but Switzerland replied instantly through Innocent Emeghara only for Kim to settle the issue.