World number three Cameron Smith struggled on Thursday in the opening round of the Australian Open, falling behind course record-setting leader David Micheluzzi, while Grace Kim led the women's tournament in Melbourne.

British Open champion Smith was left frustrated after a difficult day in which he finished one-over par with four bogeys, leaving him tied for 64th.

Smith, who won the Australian PGA Championship last weekend, is playing in his first Australian Open in three years, and will need to improve at Kingston Heath on Friday to make the halfway cut.

"I thought it was all pretty rubbish to be honest," Smith said. "That's as bad as I’ve played in a long time.

“The course was pretty difficult, the conditions were pretty difficult, but still I need to be better than that."

Local professional Micheluzzi set the benchmark, firing seven-under and course record 63 to lead by three shots from fellow Australian Matthew Griffin.

Micheluzzi opened his round with a bogey on the 10th, but then reeled off eight birdies to march four shots clear at one stage.

"I know this course like the back of my hand, and I got the putter going too," Micheluzzi said.

"I've just got to do the same thing. Just hit it good tomorrow, shoot a decent score and then obviously come into the weekend, hopefully flopping with all the big boys.”

World number 36 Adam Scott was all over the place with seven birdies mixed with four bogeys and even a double-bogey in his one-under 71.

Grace Kim equalled the women's course record at Kingston Heath with a seven-under 66.

Kim blazed five birdies in her opening five holes on her way to lead the women's tournament, while Australia's world number four Minjee Lee opened with a two-under 70 to be joint ninth.

Little more than 12 months after turning professional, Kim is headed for the LPGA Tour in 2023 after earning a maiden win on the Epson Tour and finishing fifth on the money list.

“I wasn't expecting it but I’d take it any day. I think I took my chances pretty well. I had lots of good numbers, comfortable numbers for my wedge play,” Kim said.

Minjee Lee had an eagle and two birdies in her round.

“I missed a few on the back nine that I probably could have made,” said Lee, whose eagle came at the par-5 eighth.

“That being said, it was pretty tough out there. I had two-under and hopefully I can have a good score tomorrow.”

The men's and women's Australian Open are taking place at the same time and place as part of an effort to widen the appeal of golf.

The Victoria Golf Club is the main venue across all four days with Kingston Heath hosting play on the opening two days.