Australia stunned the United States in the men's 4x100m relay on Sunday, ending a run of three straight wins and handing Michael Phelps a slow start to his last world championships.
James Magnussen had the better of Phelps in the first leg and Australia's Matthew Targett, Matthew Abood and Eamon Sullivan held off France to finish it in 3min 11.00sec, relegating Olympic champions America to third.
It was a resounding finish to the first day of pool competition after China sealed the first 10-title diving sweep and South Korea's Park Tae-Hwan won his 400m freestyle duel with Chinese ace Sun Yang.
The Netherlands successfully defended their women's 4x100m crown and Italy's Federica Pellegrini sealed her second successive 400m freestyle world title.
But it was Australia, gunning to improve on their disappointing performance in Rome in 2009, who stole the show and gave 14-time Olympic gold medallist Phelps a bitter start to his final year in the sport.
"It's frustrating," said Phelps, who will retire after the London Olympics. "As we all said after the race, it's not how we want to start it (the championships).
"We know what we have to do to get back, and we all said standing up on the podium it's clearly not the spot we want to be in," he added. "So this is really going to be a motivation."
Australia were off to a flyer with Magnussen and maintained their narrow lead throughout, while America's Garrett Weber-Gale, Jason Lezak and Nathan Adrian could not get them out of third.
Phelps, who has 22 world titles, also suffered his first defeat in the race at a major event since the Athens Olympics in 2004. The Americans also won world gold in 2007 and 2009 and at the Beijing Olympics in 2008.
Earlier, Shanghai's purpose-built Oriental Sports Centre witnessed the final act in China's magnificent 10-out-of-10 diving performance, which put the seal on a decade of dominance.
Qiu Bo epitomised China's diving mastery as he collected 585.45 points in the final, more than 40 ahead of American David Boudia with Germany's Sascha Klein taking bronze.
But there was to be no fairytale for British defending champion Tom Daley, 17, who was competing despite the death of his father from cancer in May and finished fifth.
"There is a big gap between me and Qiu Bo," Daley admitted. "The Chinese are fantastic. But you can see that everything can happen, and you can see the Chinese made mistakes in today's competition."
It was one of only two individual events in which China did not seal both gold and silver, underscoring the wide margin they enjoy over their closest rivals.
China have long threatened the elusive clean sweep after claiming seven out of eight at the 2008 Beijing Olympics and taking seven of 10 at the Rome world championships a year later.
In the evening's first swimming final, Olympic champion Park sneaked down the outside lane almost unnoticed to win his hotly anticipated 400m freestyle shootout with Sun, the quickest man this year.
Park had his nose in front early on and finished nearly a length ahead of Sun, 19, touching in 3min 42.04sec. Defending champion Paul Biedermann of Germany was relegated to bronze.
"I am glad to swim in lane one, which allowed me to fully concentrate on my own tempo and not to get distracted by the competition," said Park, who also won the title in 2007.
Park's winning time was well outside Biedermann's record of 3:40.07, set two years ago in Rome with the aid of the polyurethane swimsuits which are now banned.
World and Olympic champions the Netherlands left it late in the women's 4x100m freestyle relay before pipping the United States, as Dutch anchor Femke Heemskerk overtook Dana Vollmer with just 25m to go. Germany took bronze.
And Pellegrini won the women's 400m freestyle in 4:01.97, beating Olympic champion Rebecca Adlington of Britain into second spot with France's Camille Muffat third.
Earlier, dope-row sprinter Cesar Cielo pleaded with his critics to leave him alone as he topped the semi-final times in the 50m butterfly.
The Brazilian insisted he was just "here to swim" as storm clouds grew over his all-clear for Shanghai despite failing a drugs test.
"I don't know what else they want from me," Cielo said, after Phelps and Lezak voiced disquiet at this week's controversial decision. "I'm a swimmer, I'm here to swim. There's nothing else I can do."
Lezak said many swimmers were unhappy after the Court of Arbitration for Sport let Cielo off with a warning for testing positive for a banned diuretic. The Brazilian has blamed a contaminated caffeine supplement for the result.