The youngster, ranked 115th in the world, trailed Stevens 2-1 at the mid-session interval.
However, an impressive fightback saw the Irish starlet win the final two frames to earn a 5-3 victory and set up a last-16 encounter with world number 15 Yan Bingtao.
The Chinese star ultimately proved too good for the youngster, winning 5-1 to reach the quarter-finals.
“[I'm speechless] at the moment,” Hill told the World Snooker Tour after his victory.
[He's] my childhood hero. To play him so early on… I didn’t go out there to just be there and be happy to be there. I still wanted to win the watch and if I lost the match after being 3-1 up, I would have been disappointed.
“Even if I lost that last one, I would have been disappointed. I’m just so, so pleased with that victory. Everyone back home, my family and friends must be buzzing. I had a quick look at my phone and I think it’s going to take me to Christmas to reply to everyone.
“I’m just living up the moment and can’t wait for the next round.”
Antrim’s Mark Allen was also dumped out of the competition today, losing 5-2 to Ding Junhui of China.
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Dream journey comes to an end after another big win for Cork teen sensation Aaron Hill
Updated at 00.02
A MEMORABLE WEEK for Cork teenager Aaron Hill continued at the European Masters today.
Having stunned six-time world champion Ronnie O’Sullivan last night, the 18-year-old overcame world number 33 Matthew Stevens today.
The youngster, ranked 115th in the world, trailed Stevens 2-1 at the mid-session interval.
However, an impressive fightback saw the Irish starlet win the final two frames to earn a 5-3 victory and set up a last-16 encounter with world number 15 Yan Bingtao.
The Chinese star ultimately proved too good for the youngster, winning 5-1 to reach the quarter-finals.
Nevertheless, Hill won’t forget this week. He expressed jubilation at the result last night.
“[I'm speechless] at the moment,” Hill told the World Snooker Tour after his victory.
“Even if I lost that last one, I would have been disappointed. I’m just so, so pleased with that victory. Everyone back home, my family and friends must be buzzing. I had a quick look at my phone and I think it’s going to take me to Christmas to reply to everyone.
“I’m just living up the moment and can’t wait for the next round.”
Antrim’s Mark Allen was also dumped out of the competition today, losing 5-2 to Ding Junhui of China.
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Aaron Hill dreams European Masters Matthew StevenS Ronnie O'Sullivan Snooker