Mboko, who received a bye into the round of 16 for the Queen’s singles, was down a set but leading Karolina Pliskova 4-3 in the second when she slipped behind the baseline trying to return a shot.
The stumble effectively forced her into doing the splits, drawing a gasp from the crowd.
Mboko was visibly upset as she spoke to the attending medical staff.
She got to her feet but the official reason subsequently given for her retirement was a left knee injury, with Mboko heard saying on television cameras “there is no stability right now.”
Mboko buried her face behind a towel as she continued to consult her team, before the umpire eventually announced her retirement, with the crowd giving the 19-year-old a sympathetic reception.
“It’s such a shame,” said Pliskova, adding: “Of course, this is not the way we want to win. Hopefully she is going to be fine for Wimbledon.”
If Mboko, ninth in the women’s singles rankings, withdraws from the doubles, that will be the end of Williams’s tournament as well.
Williams, a 23-time Grand Slam singles champion, stunned the sporting world a week ago with her shock announcement she would compete at Queen’s, where she is only playing in the doubles.
“It was so fun. I had so much fun playing with Victoria,” she said after Tuesday’s win.