Having seen second seed David Ferrer dumped out on the opening day of the ATP 500 event in Tokyo, Wawrinka was looking to avoid a similar fate against Japanese wildcard Tatsuma Ito.
However, while Ferrer was able to stetch his encounter out for three sets, Wawrinka never got going in a 5-7 2-6 defeat.
World number 103 Ito delighted the home crowd by edging the opening set and grew in confidence as he picked up two breaks of serve without reply in the second.
Wawrinka would have been assured of his place at the ATP World Tour Finals had he reached the final in Tokyo, but will have to put those aspirations on hold following his premature elimination.
"It was not a good day at the office," he told the ATP's official website. "He started well and then I was trying to come back in the match.
"First-round matches are never easy. He played well, particularly at the end of the first set when he was very aggressive."
Ito will now face Germany's Benjamin Becker, who was leading Jarkko Nieminen 7-5 4-1 when the Finn retired with fatigue.
Third seed Milos Raonic avoided a shock exit by battling to a 7-6 (7-3) 6-3 triumph over Bernard Tomic, but Jo-Wilfried Tsonga was not so lucky, losing 6-4 5-7 6-7 (9-11) to Polish qualifier Michal Przysiezny.
France's Gilles Simon benefited from the retirement of Roberto Bautista-Agut to set up a second-round clash with Gilles Muller of Luxembourg, while a right leg injury ended Edouard Roger-Vasselin's involvement - Jurgen Melzer going through at his expense.
Elsewhere, Jeremy Chardy and Donald Young sealed their progression with victories over Rajeev Ram and Go Soeda respectively.