The German sixth seed, who has not won a title since winning at Flushing Meadows last year, never got into the match against the 2016 WTA newcomer of the year.
The last defending women’s champion to lose in the first round in New York was Russian Svetlana Kuznetsova in 2005.
“I was always believing until the end that I could turn around the match, because I turn around a lot of matches,” Kerber told a news conference.
“She played good, especially also at the end of the match. I’m always trying to go for it when I had the chance.”
Kerber, however, barely got that chance as Osaka, who last year had been described by 23-times grand slam champion Serena Williams as ’very dangerous’, put her on the back foot with her aggressive play.
“Today she went for it. I think she took the chances, and she played a very good match. But for me it was for sure not the best day and not the best match,” said Kerber.
Osaka, who grew up in New York, broke for 5-3 and sealed the opening set with a sizzling winner down the line under the closed roof at Arthur Ashe Stadium.
World number 45 Osaka broke in the first game of the second set when her opponent made a mess of a routine backhand, and she continued to pepper the court with winners to hold for 2-0.
Kerber had four break points but failed to convert any as Osaka completed her demolition job to claim her first career victory against a top-10 player.
She next faces either Swedish qualifier Rebecca Peterson or Czech Denisa Allertova, with a potential fourth-round clash against French Open champion Jelena Ostapenko looming.