The Australian world No.66 was beaten 7-6 (7-2) 6-4 by China's Ma Yexin in her first match since a second-round elimination at Wimbledon.
Birrell shared two wins since 2023 with her opponent, ranked 194th, but won their most recent clash in Brisbane last year.
She dropped the opening set in a tiebreaker and was broken the final three times on serve in the second to go out in one hour 46 minutes.
Earlier on Tuesday (Wednesday AEST) at another hard court event in Washington D.C, Daria Kasatkina was defeated 6-4 6-1 in her first-round match by Anna Kalinskaya.
The Russian world No.20 and fifth seed in the US capital needed only 65 minutes to see off the Australian qualifier.
Kasatkina, ranked 61st, was broken in both service games to open each set and six times in total.
The win keeps Kalinskaya on track for a quarter-final clash with top-seeded American Jessica Pegula, the 2024 runner-up at Flushing Meadows.
Chasing her first tour-level title, 28-year-old Birrell missed the chance to take on sixth seed Caty McNally next after the American downed another Chinese player in Wang Xiyu, 4-6 6-3 7-6 (7-5).
World No.77 Maya Joint booked her spot in the second round on Monday, when fellow Australians Talia Gibson and Storm Hunter were bundled out.
Joint will face Kristina Liutovav in the quarter-finals thanks to the 16-year-old beating fellow Russian and top seed Ekaterina Alexandrova, after the world No.19 retired when trailing 7-6 (7-2) 4-6 5-4.
In other results, 2017 US Open champion and former world No.3 Sloane Stephens triumphed 6-4 5-7 6-2 over eighth seed Yuliia Starodubtseva.
The current 307th-ranked American is making her way back from a foot injury which ruined the majority of her 2025 season.
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