Alex de Minaur has been reduced to racquet-smashing frustration as his alarming slump in form continued with another early clay-court tournament exit at the Italian Open.

Australia's world number eight was downed 4-6 7-6 (7-5) 6-4 by home favourite Matteo Arnaldi, who was cheered to the rafters at the Foro Italico by the excited Rome crowd on Friday morning.

But it was another dispiriting setback for de Minaur, who suffered his third loss in a row and had to soak up first-match defeats in back-to-back tournaments for the first time in three years.

After his opening-match drubbing to rising Rafael Jodar at the Madrid Masters, de Minaur had been expected to get a chance at revenge against the Spanish teen star in the last 32 by downing world number 106 Arnaldi.

But in another close contest after he had taken the opening set, de Minaur was the one who faltered at the end of a thrilling affair that lasted 4 minutes shy of 3 hours.

Having broken back to tie the third-set score at 4-4, de Minaur then got broken to love and was so enraged at netting a game-losing forehand that he smashed his racquet into the clay in an uncharacteristic show of disgust.

The rain that started to come down cannot have helped his mood either, as de Minaur seemed increasingly irritated by his own inconsistency. He coughed up 37 unforced errors in all, prompting him at times to shout out in exasperation towards his coaching box.

De Minaur has now lost four of his past five matches on clay, which hardly bodes well as he sets his sights on the French Open later this month.

It was not the biggest shock of the day, though, as Novak Djokovic, in his return to action after two months out with a right shoulder injury, bowed out 2-6 6-2 6-4 at the hands of a Croatian qualifier 18 years younger than him.

The 20-year-old Dino Prižmić, world number 79 and rising, knocked out the 24-time grand slam champ with an ace on his first match point.

"He's my idol," Prižmić said. 

"I just played unbelievably today."

The 38-year-old Djokovic, who had not played since losing to Jack Draper in the fourth round in Indian Wells in March, had his shoulder taped and looked far from his sharpest.

"I hope you understand I will not talk about that. I want to congratulate Dino, deservedly the winner today," Djokovic said when asked about his shoulder issue.

"I came in to have a match or more. Unfortunately, only a match. It's all right. I'm pleased at least that I fought until the end."

Alexei Popyrin remains the last Australian in the singles draw in Rome after Sydneysider Aleksandar Vukic was well beaten 6-4 6-2 by American 16th seed Tommy Paul.

In the women's draw, Talia Gibson was beaten by world number 20 Diana Shnaider 5-7 6-1 6-1.

The 21-year-old from Perth had looked as if she might be in the mood to make another leap forward as she came from behind in a really tight opening set, reeling off three-straight games for the loss of just three points to take it 7-5 after just under an hour.

But that first-set annexation proved as good as it would get, as the Russian powered through the next four games to take a grip she wouldn't release.

AAP