Returning after a wrist reconstruction and four knee surgeries, Kyrgios announced himself "thrilled to be back" after defeating world No.36 Corentin Moutet in Germany on Tuesday.
But the 31-year-old Aussie came up short on Thursday, losing 4-6 7-6 (7-5) 6-4 despite making a bright start against Shimabukuro, when flashes of his old flamboyance were in evidence.
He delighted the crowd, using an underarm serve to draw an unforced error from his opponent to claim the first set.
Shimabukuro hit back to win the second set in a tiebreak, and with the Kyrgios error count mounting as the match went on, he was able to close out victory in one hour and 52 minutes.
Kyrgios hit 11 winners, along with 10 unforced errors, in that third set while his opponent had 13 winners as against six unforced errors. A 100 per cent first-serve points gain was also a telling factor.
Not that Kyrgios went quietly. He had words for the chair umpire at 1-1 in the third set, claiming he should have been told it was the final game before new balls.
The exchange culminated with Kyrgios telling the umpire: ""I don't know if you're new or anything, but (for) as long as I've been on tour, the game before, it's been like 'new balls next game'.
"Because that's courtesy. You know how you hold us accountable, I think we should hold you accountable too, yeah?"
It was, however, overall another encouraging display for a player who remains unranked after playing just seven singles matches since 2022.
There was no doubting his stamina, for soon afterwards Kyrgios was back on court for the doubles, where he partnered Alexander Bublik to beat Jakub Paul and Ryan Seggerman 6-3 2-6 10-6 to reach the quarter-finals.
His singles comeback campaign now switches to the the Halle Open in Germany next week, where he will continue to press his claims for a wildcard at Wimbledon.
There were other Aussie casualties in Germany. Rinky Hijikata fell in straight sets, 6-4 6-4 to American sixth seed Frances Tiafoe.
James Duckworth is also out, although only after summoning up considerable resistance against the fourth-seeded Czech, Jiri Lehecka. He eventually lost 6-7 (8-10) 6-4 7-6 (7-3).
Over at Rosmalen, on the outskirts of the Dutch city of 's-Hertogenbosch', James McCabe was able to make litte impression against Poland's Kamil Majchrzak, bowlng out 6-0 6-3.
The one Aussie woman in action, Ajla Tomljanovic, was up against Ukraine's Dayana Yastremska in a match that will resume on Friday after rain intervened.
Tomljanovic hit back to take the match into a third set with the scores standing at 4-6 6-4 0-1.
With agencies
