Britain's Johanna Konta let two match points and a commanding lead slip as she lost to Russia's Ekaterina Makarova at the Rogers Cup in Toronto.
Makarova won 5-7 7-6 (7-4) 6-3 and will face Lucie Safarova in round three.
Konta, who had a first-round bye as the seventh seed, was playing her first match since losing to Venus Williams in the Wimbledon semi-finals.
The Briton, 26, led 7-5 5-2 but failed to convert two match points in the second set.
Makarova, 29, is ranked 42nd but extended her winning streak to seven matches after claiming the Washington title last week.
She was always likely to prove a testing opponent for Konta on her return after four weeks away, but the British number one worked her way into a commanding position.
However, two points to clinch the match slipped by as she was pegged back into a tie-break in the second set.
Makarova took it after a Konta forehand error gave her the crucial break, and the Russian got the decisive break at 4-3 in the decider.
Pliskova claims first win as number one
New world number one Karolina Pliskova beat Russian Anastasia Pavlyuchenkova 6-3 6-3 in her opening match.
The 25-year-old Czech is playing in her first tournament since her shock second-round defeat at Wimbledon.
"I had a little bit (of nerves) before the match but during the match I felt much better, especially at the end," said Pliskova, who claimed the number one ranking in July.
"I think it was not the best tennis from my side but I was trying to improve in the match."
Wimbledon champion and Spanish fourth seed Garbine Muguruza beat Belgian Kirsten Flipkens 7-5 6-2, while 18-year-old American CiCi Bellis beat Russian eighth seed Svetlana Kuznetsova 6-4 7-5.
American ninth seed Venus Williams saw off Czech Katerina Siniakova 7-5 7-5, while Romania's world number two Simona Halep beat Slovakian surprise Wimbledon semi-finalist Magdalena Rybarikova 6-3 6-4.
German Angelique Kerber defeated Croatian Donna Vekic 6-4 7-6 (7-5) but Czech 2012 winner Petra Kvitova was knocked out by American Sloane Stephens, losing 7-6 (7-4) 3-6 6-2.