Lochte touched in 1 minute, 44.44 seconds, with Phelps taking the silver in 1:44.79 while defending champion Paul Biedermann of Germany — who handed Phelps a stinging defeat in this event at the last worlds in Rome two years ago — settled for bronze in 1:44.88.
"I can't complain," Phelps said. I'm bummed I didn't win, but you know at the same time, with what we've done over the last six to eight months, I'm over a second faster than I was last year. ... So I'm headed in the right direction."
Lochte also beat Phelps in the 200 individual medley and 200 backstroke at last year's US championships, then won six golds to Phelps' five at the Pan Pacific Championships in 2010 — prompting Phelps' coach Bob Bowman to acknowledge that Lochte was the best swimmer last year.
Phelps led at the 50 and 100 marks before Lochte, who was swimming in the next lane over, surged in front.
"I knew Michael wanted to go out just to clean water so I knew I had to be in striking distance and just work what I'm good at — those underwaters on each turn," Lochte said. "It's a big confidence boost. Hopefully this win tonight will help me carry on through my other races this week."
After the race, Lochte hardly celebrated, then Phelps shook his hand, signaling a friendly rivalry.
"He's the only person I'll even say anything to in the ready room," Phelps said. "We can joke around. He can hear my headphones with having them on my head, so we were both singing along to the music. We're super laid-back, super relaxed. We have fun. We love to race each other. ... We bring the best out of each other."
Park Tae-hwan of South Korea, who won the 400 free on the opening night of the eight-day meet Sunday, was fourth.
Already energized by Lochte's win, the near capacity crowd at the Oriental Sports Center upped the noise by a few decibels when local favorite Zhao Jing of China won the next race, the women's 100 backstroke.
There was another American gold in the women's 100 breaststroke, with Rebecca Soni leading from start to finish in 1:05.05 to defend her title from two years ago. She beat Olympic champion Leisel Jones of Australia by a massive 1.2 seconds, while Ji Liping of China took bronze in 1:06.52.
Soni had been tapped by some to break teammate Jessica Hardy's world record of 1:04.45, but Soni swam slower than the 1:04.91 she posted in the semifinals.
While a whopping 43 world records were set at the last worlds, no marks at all have been set in a 50-meter Olympic-sized pool since high-tech bodysuits were outlawed at the start of last year.
In the men's 100 backstroke, Camille Lacourt and Jeremy Stravius of France finished in a rare dead heat for gold, clocking 52.76 before celebrating together over a lane rope. The bronze went to Ryosuke Irie of Japan in 52.98.
Also, Lotte Friis of Denmark won the women's 1,500 free — a non-Olympic event — in 15:49.59, with world record holder Kate Ziegler of the United States taking the silver and Li Xuanxu of China the bronze.
In 2009, Biedermann beat Phelps by more than a second in the 200 free, taking down the American's world record in the process.
Biedermann himself acknowledged after that race that his high-tech bodysuit was partly responsible for his win and Phelps' coach Bob Bowman threatened to keep his star swimmer out of the water until the polyurethane suits were banned.
This is the first major international meet since the return to textile suits, and Lochte's winning time was far off Biedermann's world record of 1:42.00.
"In '09, I just did my thing. For the moment now it's more difficult for me," Biedermann said. "The suits helped. No matter what we are back in jammers now and that's all that counts."
Phelps and Lochte, meanwhile, will face each other again in the 200 IM later in the meet.
Zhao won her race in 59.05 to the tune of banging drums from the red-clad Chinese team sitting in the stands.
Anastasia Zueva of Russia took the silver in 59.06 and Natalie Coughlin of the United States, who led after 50 meters, earned the bronze in 59.05 to raise her record total to 18 medals over five worlds.
Gemma Spofforth of Britain, the defending champion and world record holder from Britain, did not make the final after suffering a bout of food poisoning.
Defending champion Cameron van der Burgh of South Africa led the men's 50 breast semifinals. Phelps also had another swim, qualifying third behind Japan's Takeshi Matsuda and China's Chen Yin in the 200 fly semifinals.
