The Belarusian, who is No. 2 in the world, was beaten 6-4, 2-6, 6-4 in a match lasting just over two hours.
Azarenka served 15 double faults and made 44 unforced errors against German Andrea Petkovic, No. 43.
"It was an awful match and very bad performance from me, so not much to say," Azarenka said after the match.
"It happens once, twice a year to every player, and happened to me today.
"If I'm going to be doing it again, I probably should have taken a longer break (between tournaments) and just prepared myself. I don't feel like I was ready to play.
"It's just my mistake for not paying much attention after the US Open how I managed my time and how I managed my health."
Swim Week Miami Beach 2014 [PHOTOS]