After reaching the final of the ATP Cup last week, it began to look like the 34-year-old was starting to overcome his hip surgery.
However, Andy Murray's desired run in the Australian Open never came to fruition, with the five-time finalist only reaching the second round before tasting defeat.
It came at the hands of Japan's Taro Daniel, who sealed a 6-4 6-4 6-4 victory. His world ranking of 120 is the lowest to have knocked Murray out of a Grand Slam.
The pair met before in the Davis Cup back in 2016, where Murray eased to victory as Daniel picked up only five games. However, the now-28-year-old returned with much more compusure and experience on Thursday morning.
Daniel's speed and athleticism helped him resist Murray's power in the opening set, and although the Scot did break his opponent's serve, Daniel immediately responded with a break of his own.
Murray had a huge opportunity to break his opponent in the second game of the second set, but his inability to win crucial points hindered him throughout the entire match - he took only two of his 11 break points.
The Briton rallied in the third set to take an early lead, but frustration quickly creeped in as the persistent Daniel continued to claw his way back into contention.
Murray received a warning for slamming his racket into the court just minutes before Daniel clinched his second match point to progress to the third round.