Henman, on his 30th birthday, was 3-0 up in the decider after a thrilling match and will be disappointed to have won the match by default after the pair had brought the best and worst out of each other in an entertaining spectacle.
Kiefer won the first set of their fourth-round clash on the tie-break. Henman double-faulted on the first point of the game and his German opponent took the first four games. Henman broke back twice to take the set into a tie-break but lost it 7-5.
Henman was the first to lose his serve in the second set, but he then fought back to take it comfortably. Kiefer went 3-1 ahead after a tight line call went his way. Henman was clearly upset by the call but fought back to win five games in a row.
His first serve accuracy improved and he took the set 6-3 to level the match. Kiefer's game was falling apart and Henman stretched his winning run to 10 games in the third set.
The German had no answer to Henman's chip and volley tactic and was 5-0 down before registering a game. The Briton held his serve in the next game to take the set 6-1.
Kiefer found his feet to take the first in the fourth set as neither he nor Henman was able to break the other's serve. A fortuitous lob by Kiefer cost Henman break point in the fifth game and he went 3-2 down.
The set went to a tie-break at 6-6 and Henman found himself behind as the German regained his composure following a few outbursts over debatable line calls, going on to win the tie-break 7-5 to take the set and level at 2-2.
The pair looked destined for a battle in the fifth and final set. Henman took a 3-0 lead but play was halted when the German appeared to hurt his right wrist. Kiefer, following consultation with a trainer, decided to retire, handing Henman his passage to face either Olivier Rochus or Dominik Hrbaty in the quarter-finals.
Henman revealed the rollercoaster of emotions as the match swung back and forth in favour of both men.
The British number said: "I've been making slow starts so I am wary of that. He was playing great and I wasn't quite at my best but I picked my game up quickly and dominated, there was some great tennis.
"I felt the momentum was with me in the fourth but I had nothing to show for it. But I kept fighting, it was tough but I felt very good about my game and there was no need to panic.
"I'd made a good start to the fifth and it's a strange way to win a match. I thought he had cramp in his hand, which some of the guys do suffer. He sat down and Per (the trainer) came on and they were just talking, whereas often he would have a massage.
"Then it crossed my mind that it might be more serious."
Looking ahead to his quarter-final meeting with either Rochus or Hrbaty, Henman referred to the back problem he had been suffering with since just before the start of the tournament.
He said: "Not long ago I could barely walk onto court. But I'm playing good tennis and that gives me confidence."