The Spanish world number one was hampered by a knee injury at the tail-end of the 2017 season, and he entered the opening Grand Slam of the year without playing a warm-up event.
But he wore no strapping and appeared to move freely in a ruthless 6-1, 6-1, 6-1 demolition of the Dominican Republic's Victor Estrella Burgos in just 94 minutes on Rod Laver Arena.
"I'm very happy to be back, it's a very important beginning for me. It's good news for me," he said, adding that he had experienced "no problems" with his often troublesome knee during the match.
"I want to enjoy every moment I'm here on this court."
Second seeded Caroline Wozniacki also comfortably progressed with a straight sets win over Romanian Mihaela Buzarnescu as she searches for a maiden Grand Slam crown.
But there was no celebrating for fifth seed Williams, who was stunned by Swiss star Belinda Bencic, fresh from winning the Hopman Cup with Roger Federer.
Fellow American and US Open champion Sloane Stephens was also sent packing, along with big-hitter CoCo Vandeweghe, the 10th seed and a semi-finalist last year.
And the US misery was compounded on the men's side with eighth seed Jack Sock toppled by Japan's Yuichi Sugita and 16th-seed John Isner sent home by Australian Matthew Ebden.
Other seeded casualties included South Africa's 2017 US Open finalist Kevin Anderson, who was bundled out a in a five-set thriller by Britain's Kyle Edmund.
Third seed Grigor Dimitrov survived, as did volatile Australian Nick Kyrgios, who collected a code violation for swearing at the crowd.
- Learning curve -
Seven-time Grand Slam winner Williams, in her 77th major, struggled against a player who had never before beaten her to go down 6-3, 7-5 and deprive the tournament of one of its biggest names.
It is the first time since 1997 that there will be neither of the Williams sisters in the second round, with Serena not playing after giving birth to her first child.
"I don't think I played a bad match. She just played above and beyond," said the 37-year-old.
Bencic, 20, said featuring with Federer at the Hopman Cup had helped a lot, with the Swiss legend giving her advice and tips.
"I think all the week it was so great learning from him on the court or off the court," she said, adding she spoke to him briefly after her match and he "was very happy for me".
Vandeweghe slumped out to Hungary's Timea Babos 7-6 (7/4), 6-2 and revealed afterwards she had been bedridden with flu for four days.
With Stephens also departing, to China's Zhang Shuai, it was a calamitous day for the United States, in stark contrast to the last Grand Slam of 2017, when all three of them made the semis at the US Open.
It left the women's draw more unpredicable than ever, which was good news for French Open champion Jelena Ostapenko, who saw off Francesca Schiavone 6-1, 6-4.
The sevnth seed raced through the first set on Rod Laver Arena against the veteran Italian who was bizarrely wearing a back brace on the outside of her shirt, before a tougher second set.
"I knew before the match that it's not going to be easy. She's very experienced player and she's very long time on tour," said the Latvian.
Fourth seeded Ukrainian Elina Svitolina, who won the lead-up Brisbane International after picking up five WTA Tour titles last year, was another to stay in the hunt.
Also into the next round was German 12th seed Julia Goerges, who won the lead-up Auckland Classic and is now on a 15-match unbeaten streak having ended 2017 with victories at Moscow and Zhuhai.
Twelve-time Grand Slam winner Novak Djokovic, seeded 14, starts on Tuesday, along Federer, former world number one Maria Sharapova and top seed Simona Halep.
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All rights reserved to Arab Today Media Group 2023 ©