In a thrilling encounter, Jarred Cole beat 'Wolfie' 2-0 and will now Antony Allen in the next round at Lakeside.
Cole - who averaged 93 on his debut appearance at the tournament - took the opening hold before Adams responded with a 121 checkout on the bull.
Cole averaged 93 on his debut to see off the three-time World Champion in a 2-0 win as 'Wolfie's return to action on the Lakeside stage didn't prove a fruitful one.
The 21-year-old went on to win the set before sealing victory with an 85 checkout, hitting a double 10 in the process.
Speaking after his win, Cole said: "I can't put it into words, I'm so happy - my overall performance, everything, it just fell into place and almost feels like a dream come true.
"You know how iconic [Martin] is at this venue, you can hear the crowd. Yes there was extra pressure opening up the tournament. I wanted to play and put on a show for the crowd but in the same sense, I couldn't have predicted it any better.
"We've played each other a fair few times now and it's very 50/50. I can beat him and he can beat me. On today, I got lucky, he didn't play his game and I'm very happy I did with my game.
"I felt like I was almost at home here," Cole added when asked about how he felt making his debut.
"There's nobody who I look at and feel I can't beat if I turn up and so far, it's been really good."
As for Adams, he has indicated it could be his final appearance at Lakeside.
"It always feels great to come here and play. I mean I'm looking forward to the World Seniors Masters that's going to be here so playing at the Lakeside is something when you're younger you want to do. I've done it 26 times on this stage so happy days," he said to Online Darts.
On whether Cole can go all the way, Adams added: "I thought Jarred's a good young player, he's a nice lad, he's got a good temperament. He's not lairy, feet on the ground and gets on with his game.
"I know he's got a lot more to offer in his game, he needs to sharpen up a little bit on some of his double shots but he's doing well.
"He's only a young man. There's no point starting off with your best game on Day One, you want to get through now the second round, now you want to move, now you want to improve."
Round one results so far:
Martin Adams (81.97) 0-2 (92.69) Jarred Cole (1-3, 1-3)
John Scott (75.05) 0-2 (89.64) Johnny Haines (1-3, 0-3)
Paula Jacklin (68.66) 0-2 (85.89) Rhian O'Sullivan (0-3, 0-3)
Ben Hazel (72.59) 2-1 (74.27) Haupai Puha (3-2, 1-3, 3-0)
Andreas Harrysson (84.94) 1-2 (82.97) Laszlo Kadar (3-0, 0-3, 2-3)
Amanda Harwood (66.62) 1-2 (64.96) Marjolein Noijens (2-3, 3-1, 1-3)
Jim McEwan (101.32) 2-0 (79.60) Landon Gardiner (3-0, 3-1)
Priscilla Steenbergen (56.77) 2-1 (53.05) Darlene van Sleeuwen (3-2, 2-3, 3-0)
Mark Barilli (77.80) 0-2 (75.96) Rory Hansen (1-3, 2-3)
Mark Graham (79.66) 0-2 (89.46) Dave Prins (1-3, 0-3)
Suzanne Smith (68.36) 1-2 (66.87) Jo Clements (3-1, 0-3, 2-3)
Paul Hogan (79.00) 1-2 (78.32) Justin Thompson (1-3, 3-2, 0-3)