Lee helped herself to eight birdies, including a delightful tap-in two at the last in driving rain, to upstage the heavyweights during Thursday's opening round in Sydney.
The 16-year-old only qualified on Monday yet now enjoys a one-stroke lead over former world No.1 and two-time major champion Jiyai Shin, with fellow PGA Tour star Steph Kyriacou one shot further back in solo third at four under.
"Am I leading the Australian Open? Oh, honestly I never thought that (was possible)," Lee said.
"Hopefully I can do that for the next three days."
Even more remarkably, the Year 10 Endeavour Sports High School student almost missed her morning tee time.
Missing morning tea at school is one thing, but not on your Australian Open debut.
"I thought I was at 8.38am and not 8.28am and I've learned my lesson. I won't do that again," she said.
"I was putting and my coach says, 'Rachel, you're on the tee'. So I just ran out there."
Minjee Lee fought her way back after a troublesome opening nine at the Women's Australian Open. (Dan Himbrechts/AAP PHOTOS)
Open favourite and unrelated namesake Minjee Lee earlier mounted a spirited back-nine fightback to card a three-under 70 and keep the dream alive of her and brother Min Woo completing an historic sibling double at the $3.4 million dual-gender event.
After starting on the 10th and moving to two under through five holes, Lee seemed unsettled by a three-putt bogey on the 15th.
That preceded another dropped shot on the 17th before a dreaded double-bogey on 18 dropped Lee back to two over heading to the turn.
But the world No.5 and dual major championship winner fashioned six birdies coming home, including one at the last to ice her round.
Playing alongside Minjee, Kyriacou used her intimate course knowledge to post a 69 to trail teenager Lee by two strokes.
Stephanie Kyriacou opened her Australian Open campaign with a solid four-under 69. (Dan Himbrechts/AAP PHOTOS)
Japan's Ayaka Sugihara landed the first ace of the tournament, holing out from 144 metres with a seven iron at the par-3 11th at The Australian.
But she could still only manage a two-over 74 to be seven shots adrift of the leader.The highlight of Kyriacou's steady round was an eagle three at the par-3 third hole to go with three birdies and her only bogey on No.18.
"It was a pretty solid round," she said.
"I was pretty nervous on the first and it took me a few holes to settle in, but then as it kind of goes on everyone's just walking along and the nerves eased down.
"But it still wasn't like normal. A bit of adrenaline too. I feel like I didn't even hit it my best, so I'm going to go work on that and then hopefully (go) a bit lower tomorrow."
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