Elsewhere, there were comfortable first-round wins for fourth seed Tim Henman, who beat German qualifier Florian Mayer 7-5, 6-1, and former French Open champion Carlos Moya, who defeated Alberto Martin 6-4, 6-2.
Schuettler, who last month beat former world number ones Gustavo Kuerten, Lleyton Hewitt and Moya on his way to the final of the Monte Carlo Masters, went out of the tournament in the opening match on centre court.
The German was broken in the fifth and seventh games of the first set as the American, ranked 34th in the world, unleashed a barrage of heavy forehands and precise service returns.
Schuettler took the second set as Spadea committed a series of unforced errors, but then let his concentration wander to fall 5-2 behind in the decider.
Having saved a match point while fighting back to 5-5, Schuettler then produced an edgy service game to give Spadea another break and this time the American held his nerve to close out the match.
"Obviously it's tough to come out here and play the world number five and third seed in the opening round," said a relieved Spadea, who had lost his previous two matches against Schuettler.
"I was disappointed I didn't put away the match at 5-2 (in the third set), but I had to stay positive. He forced me to work hard to win the match."
The only other seed to fall on a quiet opening day was 16th-ranked Juan Ignacio Chela, who lost 6-4, 6-2 to fellow Argentine Mariano Zabaleta.
Henman started shakily against Mayer, double-faulting to lose his opening service game, but quickly found his range to win 7-5, 6-1 and set up a second-round clash with Radek Stepanek, who brushed aside 2001 Wimbledon champion Goran Ivanisevic 6-2, 6-4.
Meanwhile, Spain's Carlos Moya tried to explain his disappointing record in Rome after dispatching compatriot Martin.
Despite winning 12 of his 18 career titles on clay, including the 1998 French Open, the sixth seed has never survived beyond the quarter-finals in the Italian capital.
"I played well today, but usually I don't play very well here. I don't know the reason," he said.
"Maybe the court is a little bit too fast for me. It seems like there is altitude, and usually I don't like to play at altitude.
"I hope this year is going to be different. It would be great for me if I can get really far because this year I want to get to the Masters again and doing well in the big events like this one will help a lot."
Other players to reach the second round included fifth seed David Nalbandian, who beat Sweden's Robin Soderling 6-4, 6-4, and 2002 Roland Garros champion Albert Costa, who defeated 1997 Rome winner Alex Corretja 7-6 (5), 6-1.
