The deciding fourth set was a memorable one, with the pair trading outrageous winners along with untimely errors, the most costly of which was a double fault from 11th seed Tsitsipas on break point in the ninth game.
The 20-year-old Michelsen then served out the match 7-5 6-3 2-6 6-4 to claim the biggest win of his burgeoning career.
"First of all I just tried to stay super composed out there," said Michelsen, who struggled at times with his second serve in the deciding set.
"I knew it was going to be a battle out there to the end."
It was the first time since 2018 that Tsitsipas had lost in the first round at Melbourne Park.
Stefanos Tsitsipas came up just short against rising US star Alex Michelsen at the Australian Open. (James Ross/AAP PHOTOS)
He lost the 2023 final to Novak Djokovic and had also reached the semi-finals at Melbourne Park on three other occasions but is still searching for that elusive maiden major title.
Michelsen's second-round opponent will be either Australian wildcard James McCabe or Spanish qualifier Martin Landaluce.
Later in the day session on Monday, world No.1 Jannik Sinner starts his title defence against Chilean Nicolas Jarry.
The two feature matches of the night session involve 24-time major winner Novak Djokovic and No.3 seed Carlos Alcaraz.
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