The draw was announced Thursday. Williams, 39, is the oldest women's player in the tournament, while Gauff, 15, is the youngest. Gauff upset Williams last year at Wimbledon after becoming the youngest qualifier in tournament history.
Defending champion Naomi Osaka is also in Gauff and Williams' quarter of the tournament bracket, potentially leading to a tough third-round matchup. Osaka -- No. 3 in the world -- battles Marie Bouzkova in the first round.
Men's No. 1 Rafael Nadal battles Hugo Dellien in the first round. No. 2 Novak Djokvoic -- the defending champion -- and No. 3 Roger Federer are in the same half of the men's bracket, setting up a possible semifinal matchup between the tennis stars. Djokovic takes on German Jan-Lennard Struff in the first round. Federer will face American Steve Johnson in Melbourne.
Other notable first round matchups in the women's draw include: No. 2 Karolina Pliskova against Kristina Mladenovic; No. 4 Simona Halep against Jennifer Brady; No. 5 Elina Svitolina against Katie Boulter; No. 6 Belinda Bencic against Anna Karolina Schmiedlova; No. 7 Petra Kvitova against Katerina Siniakova; No. 9 Kiki Bertens against Irina-Camelia Begu; No. 10 Madison Keys against Daria Kasatkina; No. 19 Donna Vekic against Maria Sharapova; No. 24 Sloane Stephens against Zhang Shuai; No. 21 Amanda Anisimova against Zarina Diyas; and former world No. 1 Caroline Wozniacki against American Kristie Ahn.
The men's first-round draw includes: No. 4 Daniil Medvedev against Frances Tiafoe; No. 5 Dominic Thiem against Adrian Mannarino; No. 6 Stefanos Tsitsipas against Salvatore Caruso; No. 7 Alexander Zverev against Marco Cecchinato; No. 8 Matteo Berrettini against Andrew Harris; No. 9 Roberto Bautista Agut against Feliciano Lopez; No. 10 Gael Monfils against Lu Yen-hsun; John Isner against Thiago Monteiro; Nick Kyrgios against Lorenzo Sonego; and Stan Wawrinka against Damir Dzumhur.
Djokovic has won three of the last five Australian Open men's singles titles and is a seven-time champion of the tournament. Serena Williams has seven Australian Open singles titles.