The 29-year-old Australian was agitated and in noticeable discomfort during his 7-6 (7-3) 6-3 7-6 (7-2) loss to world No.86 Fearnley on Monday evening.
Kyrgios has been hindered by an abdominal strain in the lead up to Melbourne, his first appearance at a major since making the 2022 US Open quarter-finals and then requiring wrist and knee surgeries.
Throughout the first set, the 2022 Wimbledon runner-up was heard complaining about his inability to generate pace on serve compared to his 23-year-old opponent, whom he also denigrated as "a f**king challenger player".
"F**king serving 205(km/h) when I can serve 230(km/h)," the usually big-serving Canberran said.
Kyrgios looked well below his best before a third set comeback, which proved not enough. (James Ross/AAP PHOTOS)
Kyrgios, who belted 13 aces and 35 winners, kept holding serve but it appeared to grate on him as the first set progressed.
"I've got a f**king challenger player serving bigger than me," he said. "It's a lot of fun for me."
Playing on a protected ranking of No.21, Kyrgios still managed to force the opening set to a tiebreaker but fell behind in the count 6-1 and it proved unassailable.
The typically boisterous crowd in John Cain Arena tried to rally the former world No.13 after he dropped serve to go down 2-0 in the second set.
He went searching for answers from his box before calling for trainers, citing his abdominal strain as the issue.
"I had a grade one before I got here," he said. "I don't even know why I played.
"So f**ing dumb."
Fearnley played a calm and controlled match to dispose of Kyrgios in two hours and 19 minutes. (James Ross/AAP PHOTOS)
Kyrgios spoke to the trainers two games later at the change of ends but opted to continue and cruelly had three set points brought up on him with a let cord that just dribbled over the net.
Audibly groaning while preparing to serve, he vowed not to throw in the towel for as long as possible.
"I'm just going to keep going until I can't go anymore," Kyrgios told his box, before he was broken for a second time in the third game of the third set.
There were signs of life at 2-3 when Kyrgios sneaked to the net to bring up his first break point chance of the match.
A well-timed body serve snuffed it out but Kyrgios bravely fought on to break after four deuces and get back level, then held serve to love to lead 4-3 after a stunning behind-the-back shot.
With the crowd sensing the moment, Kyrgios had a set point at 4-5 but again the Scot served his way out of trouble.
A tiebreaker was needed to decide the set and Kyrgios was found wanting as Fearnley closed out the contest.
Fearnley battled nerves ahead of the "rowdy" match and said he could tell Kyrgios was struggling.
"I thought I played good," he said in his on-court interview.
"Sorry for Nick. I could tell he was dealing with some stuff but I thought it was a great match and I really enjoyed playing in front of you guys."
Frenchman Arthur Cazaux, who upset 28th-seeded Argentine Sebastian Baez in a five-set epic, awaits Fearnley in the second round.