The Serb won the first set with ease but world No23 Querrey fought back to claim a 0-6 7-6 (7-5) 6-4 victory and book his place in the third round in France.
But despite the defeat, Djokovic – who is guaranteed to finish the year as the world No1 – says he has not been feeling at his best and will relish a rest ahead of the ATP World Tour Finals in London next week.
“I was concerned about how long I can keep that level, since physically I’m not feeling very good in last couple of days,” said Djokovic.
“When you’re playing somebody that hits, that serves that well in the corners, there is nothing you can do.
“During the second set I already felt that physically I’m down, and I struggled every game.
“It’s unfortunate, but on the brighter side, I have a little bit more time to rest because I had really difficult period in the last couple of weeks. Some things happened and [there are] a lot of things on my mind.”
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BIOGRAPHY: Marcus Rashford