Serena Williams was defeated by sister Venus in the BNP Paribas Open at Indian Wells.
The 36-year-old 23-time Grand Slam champion admitted she has "a long way to go" on her comeback after the birth of her child.
Venus, 37, beat her sister 6-3 6-4 and will proceed to the round of 16 where she will face Anastasija Sevastova.
It was the 29th meeting between the Williams sisters - Serena now leads 17-12 - and it lasted 87 minutes in front of a main stadium crowd of more than 10,000 fans.
Serena hit four aces but had her serve broken four times. She spoke after the match: "It was good to play and try to get in the rhythm and get into the swing again.
"I can't really replicate the situation no matter how much I do in practice. I make those shots 10 times out of 10 in practice.
"It's just the nerves, the anticipation you feel naturally. It's a little bit of everything that comes in a match that just doesn't normally happen.
"It's good that I don't have to say that this is the best tennis I have ever played and I lost. My room for improvement is incredible.
"So I have just got to keep saying at each tournament that my goal is just to be better than the last. I don't want to go backwards."