The 18-year-old Tomic broke the No. 9-ranked American twice to win the second set in 31 minutes. Fish fought off three more break points in the third set before Tomic was finally able to convert on his fourth chance with a backhand cross-court passing shot to go up 5-4.
The result damages Fish's chances of qualifying for the season-ending ATP World Tour Finals in London.
Tomic, who lost to Fish in the quarterfinals of the Japan Open last week, is having a breakout season on the ATP tour. He reached the quarterfinals of Wimbledon and cracked the top 50 in the rankings this week at No. 49.
"I can't expect much more for myself. I've had a good last six months. I'm playing well here," he said. "I think you just gotta play tennis, have fun. That's what I realized, not to have a lot of pressure." While Fish fell, countrymen Ryan Harrison, Alex Bogomolov Jr. and Andy Roddick all advanced.
The 19-year-old Harrison beat 11th-seeded Viktor Troicki 6-3, 6-3, while Bogomolov Jr. defeated Marcel Granollers of Spain 6-2, 6-3 in first-round matches.
Roddick, meanwhile, reached the third round for the first time in three appearances in Shanghai after a 7-6 (3), 7-5 win over big-hitting youngster, 20-year-old Grigor Dimitrov of Bulgaria.
The 10th-seeded Roddick came back from a break down in the second set to level the score at 4-4 when Dimitrov put a backhand into the net after slipping at the end of a 43-stroke rally.
The Bulgarian broke back in the next game, however, prompting an angry Roddick to slam his racket into his tennis bag during the changeover.
"I don't know that I made a first serve that game, so that was frustrating for me," Roddick said. "I felt like I was returning pretty well and hitting my forehand pretty well. Then all of a sudden, you know, I'm not putting a first serve in the court." Roddick then saved a set point on Dimitrov's serve before breaking his opponent at love to close out the match.
"He's definitely got all the shots," Roddick said. "He should have closed me out in the second set." Dimitrov finished with 28 winners, nearly twice as many as Roddick, but also had 51 unforced errors.
Roddick next plays seventh-seeded Nicolas Almagro of Spain, who defeated countryman Tommy Robredo, 7-5, 6-3.
Almagro, who has won three titles this year, is trying to clinch one of the four remaining spots at the ATP World Tour Finals.
The only other seeded players to fall Tuesday were two Serbs — 11th-seeded Troicki and ninth-seeded Janko Tipsarevic.
Tipsarevic lost to Spain's Feliciano Lopez 7-6 (2), 7-6 (3), his second straight first-round defeat after capturing his first ATP title in Kuala Lumpur last month.
Germany's Florian Mayer, seeded 15th, knocked out Argentina's David Nalbandian, 6-3, 6-4, in another second-round match. Nalbandian, a former Wimbledon finalist, has struggled since returning from a hamstring injury this summer.
Other winners included Milos Raonic of Canada, who came back to defeat Michael Llodra of France, 6-7 (2), 6-2, 7-6 (5), as well as eighth-seeded Gilles Simon of France, 12th-seeded Alexandr Dolgopolov of Ukraine, 13th-seeded Stanislas Wawrinka of Switzerland and 14th-seeded Jurgen Melzer of Austria.
Wawrinka edged out Donald Young of the United States 6-7 (5), 7-6 (2), 6-2.
