Raducanu was competing in the last 16 for the first time in her career but was no match for the recent Madrid Open finalist who took one hour and 21 minutes to book her place in the quarter-finals at the Foro Italico.
With her new coach Mark Petchey watching on, Britain's number two struggled against Gauff's powerful forehand and lost the opening set in just 40 minutes.
Raducanu came from one set down to beat former world number 10 Veronika Kudermetova in the previous round, but all hopes of another famous comeback were quickly extinguished on a blustery afternoon in Rome.
In a contest between two former US Open champions, Gauff broke Raducanu's serve in the second set to lead 3-2 and powered through the next three to reach the last eight for the second year in a row.
"I found it really hard today," Raducanu said. "I think the conditions were so different. It was really windy and so high bouncing, and I just found like every ball was out of my strike zone, so I couldn’t really get a good hit. And then it just kept getting higher and higher. And it was really hard.
"Coco played a great match too and found, like, great shape, great width, great depth. I felt outplayed, but it was good to kind of see where I’m at in these conditions."
She added: "You feel there's no space on the court (against Gauff). You don’t really know where to hit, especially when she’s playing like that.
"I played really good tennis and I came through some really tough opponents as well - recovering after a set down and two three-set wins, which was big for me - so I’m happy about that.
"I haven’t really played these top opponents very often because I haven’t been in the tournament long enough, so for me to play them now is good exposure."
Gauff, twice a beaten semi-finalist, is bidding for her maiden title in Rome after a patchy year that has seen her win the United Cup as well as suffer shock early losses and defeats to players ranked outside the top 50.
"I feel really happy with how I played. I thought overall I played a great match. I think I really was the one dictating the match for the most part," she told reporters.
"It was super windy, especially like in the second set. It definitely did play a big part. I'm from Florida, so I'm used to kind of dealing with it, working with it.
"Sometimes you have to learn to just let go with the wind, know that you just have to kind of move that extra step.
"Some points aren't going to be won in pretty ways, which a lot of points towards the end were won in ugly ways. That's part of tennis in the wind. It's not always pretty."
The 21-year-old will face Mirra Andreeva on Wednesday for a place in the semi-finals after the world number seven battled past Clara Tauson 7-5, 6-3, 6-2, but Gauff refuses to look any further.
"The quarters is a long way to that trophy so (I'll just play) match-by-match and try to improve.
"Looking too far ahead can kind of be more of a curse than a blessing," she added.