Isner's defeat was another blow to a tournament already deprived of star power by the withdrawals of Gael Monfils, Roberto Bautista Agut and Tomas Berdych and the first-round losses of Hyeon Chung and Denis Shapovalov.
Fritz had lost to Isner in their two previous meetings but prevailed Wednesday in the face of Isner's barrage of 26 aces. The 21-year-old Fritz, ranked 50th, managed to beat his 10th-ranked compatriot for the first time by winning a handful of key points in both tiebreaks.
"It feels great," Fritz said. "John's beaten me twice before, and it was close.
"I really wanted to get the win on him, and I knew I could. We had a lot of close points, and it just feels really good to get through that."
Fritz achieved the rare feat of breaking Isner's serve in the fifth game of the first set. He earned three break points, and Isner saved the first two with aces, but Fritz converted the third for a 3-2 lead. Isner broke back immediately and held for the rest of the set to set up the tiebreak.
Fritz immediately grabbed a mini break and took a 3-0 lead. Isner battled back with two aces but couldn't disrupt Fritz's serve -- he served 12 aces of his own -- and the younger American took the set in 53 minutes.
The second set went to a tiebreak without a service break, with Fritz saving the only break point of the set in the third game. Fritz again took the early advantage, gaining a mini break on the third point and serving for a 4-1 lead.
This time Isner broke back for 4-4, but Fritz took a point against serve again at 6-4, sweeping a backhand winner across court as Isner advanced on the net.
Fritz won more tiebreaks in 2018 than any other player, and he put that ability to good use Wednesday to claim his fourth win over a top-20 player.
"I like to think that one of the strengths of my game is playing under pressure and playing the big moments well," Fritz said. "More often than not in the matches I lose, that's where I get let down.
"So, I'm happy to start every year and today as well playing well under pressure and handling those big moments well."
Elsewhere, No. 2 seed Fabio Fognini beat Peter Gojowczyk 6-1, 4-6, 6-2 to set up a meeting with former champion Philipp Kohlschreiber, who progressed after a comfortable 6-4, 6-4 win over Ugo Humpert.
Leonardo Mayer saved three match points and fought from a set down to defeat Matteo Berrettini 5-7, 7-6 (5), 6-3, Jan-Lennard Struff thrashed Australian wildcard Rubin Statham 6-2, 6-1 while former world No. 3 David Ferrer received a guard of honour as he was forced to retire from his match against fellow Spaniard Pablo Carreno Busta.
Ferrer, who won in Auckland in 2007 and was making his final appearance at the tournament, withdrew due to a calf injury two games into the match.