
Hewitt failed on a match point while serving for victory, and fell as Italian Andreas Seppi produced a winning tiebreak effort for a 3-6, 7-6 (7-4), 7-6 (7-4) trip to the second round after nearly three hours.
Dutch wild card Robin Haase upset last weeks Marseille champion Murray 7-5, 6-3.
Hewitt won the Rotterdam title in 2004 and said he came back four years later after missing last year with injury.
With his brief winter indoor season now over as he heads outdoors to Las Vegas, the Australian said he should have performed better.
"It was tight and I should have won," said the former Wimbledon and US Open champion. "But it's not like I need indoor matches. I didn't come here expecting a whole heap."
Hewitt said he would have preferred to have won a few rounds this week, but would just have to move on. "He played his best in tight situations," he said of Seppi, ranked 42nd.
"It was frustrating to have opportunities and not take them."
The Australian was annoyed at a growing tiebreak jinx. Dating to last October, he has lost seven of eight.
Murray came to the Dutch port city riding the momentum of his second title this season, earned at the weekend over Mario Ancic.
But the world number 10 didn't bargain on the hot form of his 94th-ranked local opponent, who played the 2005 junior Wimbledon final.
Haase, aged 20 like Murray, fired past in just under 90 minutes despite seven aces from Murray's losing effort.
"I felt decent, I wasn't tired physically or mentally," said Murray, "But I had trouble with my return game.
"The courts here are much slower than Marseille and rallies last for an average of nine or ten shots, That makes it tough."
Murray is riding an up-and-down season, winning titles in Doha and Marseille while going out in the first round at the Australian Open and in Rotterdam.
Murray stands 10-2 on the season as he heads off for a few days of rest and preparation for his next event outdoors in Dubai.
"So far this year has been pretty good. If I have a few more months like this it will definitely help me stay in the Top 10," said Murray.
In another first-round match, Spain's Fernando Verdasco beat recovering Jarkko Nieminen 6-2, 6-2 after the Finn ran out of energy following a fever last week.
By Bill Scott, dpa