Navratilova, who holds 167 singles titles, more than any other player in the history of tennis, lost 1-6 6-3 6-2 to Milagros Sequera of Venezuela in the first round of the Amelia Island WTA championship in Florida.
But world number one Justine Henin-Hardenne and fourth seed Lindsay Davenport safely reached the third round of the clay-court tournament.
Belgian Henin-Hardenne battled her way past Dinara Safina of Russia 6-4 7-6 in their second round clash while American Davenport overcame Tian Tian Sun of China 6-2 7-5.
The focus of attention, though, was on wildcard Navratilova, who said she thoroughly enjoyed her singles comeback.
"It was fun to be out there," she told reporters. "It certainly whet my appetite to play more singles.
"This certainly helped my doubles game. I served every other game so I was able to work on my serve, which is important."
Navratilova retired from singles after the WTA Tour Championships in November 1994 before returning to the circuit in 2000 to play doubles.
Since resuming she has won two Grand Slam titles in mixed doubles and eight women's doubles crowns.
MENTAL STAMINA
The American said she found it impossible to concentrate for the whole match on Tuesday.
"I think that I lost it mentally," Navratilova said. "I couldn't sustain my concentration for the entire match, so my mental stamina wasn't there."
Sequera said: "It was definitely intimidating to play her...I was so nervous in the first set and of course the fans were supporting her because everyone loves her, so I just kept saying to myself, 'Don't think, just play'.
"She's very physically fit and I think that she could still beat a lot of players out there."
Navratilova's tally of 1,440 career singles match wins is a record for the women's Tour. She was ranked world number one for a total of 331 weeks, longer than any woman except Steffi Graf.
At the end of 2003, Navratilova resumed her Fed Cup career and is part of the squad for the U.S. away tie against Slovakia at the end of this month.
She has indicated she intends, if picked for the team, to represent the U.S. at the Athens Olympics in August.
Navratilova has also been handed a wildcard to play singles at next week's Family Circle Cup in Charleston, South Carolina
