Osaka was the third former Open winner to bow out of the draw after Serena Williams and Caroline Wozniacki, who won the title in 2017 and 2018, lost their respective matches at Melbourne Park earlier in the day.
The teenager — who was ranked 685th in the world in January 2019 — hit the headlines midway through last year, when she made it to the round of 16 at Wimbledon, along the way beating seven-time Grand Slam singles winner Venus Williams, Magdalena Rybarikova and Polona Hercog before losing to the eventual champion, Simona Halep.
Gauff, who lost to Osaka easily 6-3, 6-0 at the US Open last year, avoided a repeat defeat as a string of backhand errors off the Japanese player's racquet gave the 15-year-old the break midway through the opening set.
The pattern repeated itself in the second set, as Osaka continued to misfire and Gauff served out the victory after just 67 minutes on court.
"Two years ago I lost in the first round in juniors. Now I'm here. This is crazy," she told Channel Nine after the match.
"I was just telling myself one point at a time and keep fighting. You never what happens on this court."
The American was asked when she was going to get back to homework, replying: "Probably tomorrow because I want to go to sleep tonight".
"But my teachers, they're giving me some time because, considering the circumstances, they're letting me submit some of the assignments late. So that's OK." - Reuters/Xinhua/Asian News Network