The left-hander from Stockport, who had to go through qualifying to book his place in the opening grand slam of the year, fell 6-4 6-4 6-3 to the Australian at Melbourne Park.
Kyrgios has recently recovered from Covid-19 and was playing his first match since September, but his full bag of tricks was on show.
In front of a raucous crowd he set the tone with an underarm serve through his legs in his first service game and continued from there.
He also stopped to sip a fan's beer on the way off the court.
It was a difficult role for Broady in his first main-draw match at the tournament.
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