Lochte cruised to victory in four minutes, 05.18 seconds, followed in by Brazil’s Thiago Pereira and Japanese 17-year-old Kosuke Hagino.
Phelps said: “I'm a bit frustrated, I'm not feeling that great. I just want to put this race behind me and move on."It's not the start that I would have liked to have had but I've just got to move up.
"I have a bunch of other races and hopefully we can finish a lot better than we started. That's what I'm going to try to do.”
Sun Yang was crowned Olympic champion in the 400m Freestyle as he continued to leave an indelible mark on the global stage.
The 20-year-old was second over eight lengths at the World Championships in Shanghai last year before producing a sublime 1,500m Freestyle in which he lowered Grant Hackett's long-standing world record.
He qualified fastest from a dramatic morning session which had seen defending champion Park Tae-hwan disqualified and then reinstated.
South Korean Park was second in the final, with Peter Vanderkaay of the United States third.
Ye Shiwen, just 16, secured China's second gold of the session and also the first long-course world record set by a woman since the ban on performance-enhancing suits.
Ye produced a superb freestyle to stretch away and touch in four minutes 28.43 seconds. World champion Elizabeth Beisel was second with Ye's compatriot Xuanxu Li third.
The last final of the night saw Australia claim gold in the women's 4x100m Freestyle Relay final.
Alexandr Vinokourov stunned the home crowd who had hoped to cheer Mark Cavendish to victory as he sprinted to Olympic gold in the men’s Cycling Road Race.
The United States’ women’s Basketball team were pushed by Croatia before pulling away in the fourth quarter to win 81-56.
The Croatians trailed by just three at half-time but the US kicked on to cruise home with Tina Charles top-scoring with 14 points.
There was a surprise earlier as China knocked off the Czech Republic 66-57 but the second game saw European champions Russia beat Canada 58-53.
New Zealand rowers Hamish Bond and Eric Murray smashed the world record in the men’s pair, previously set by Matthew Pinsent and James Cracknell in 2002.
Murray and Bond won their Olympic heat to qualify for the semi-finals with a victory in six minutes 08.50 seconds.
The world number one and gold medal favourite lived up to her billing by beating Poland's Sylwia Bogacka into second. China's Yu Dan collected the bronze.
China’s Wang Mingjuan claimed the first Weightlifting gold in the women’s 48kg weight category at ExCel while in the Judo there were golds in the under-48kg category for Brazil’s Sarah Menezes and Russian Arsen Galstyan in the men’s -60kg.
Italy claimed a shock gold in the men's Archery Team event as Michele Frangilli held his nerve to hit a 10 with the last arrow of the final against the United States.
Italy were nine behind with one shot remaining when Frangilli struck centre gold.
The dramatic 219-218 win for Frangilli, Mauro Nespoli and Marco Galiazzo against Brady Ellison, Jacob Wukie and Jake Kaminski capped a day of surprises in the competition, with favourites South Korea losing 224-219 to the USA in the semis.
The United States left with silver, while the Koreans saw off Mexico to take bronze.
Italian joy was tempered, however, as Fencing star Valentina Vezzali missed out on a piece of Olympic history.
The 38-year-old police officer was thwarted by compatriot Arianna Errigo in the semi-finals in her bid for an amazing fourth consecutive foil gold at the Games.
No woman has achieved that in any individual Olympic event - and the only men to have done it are Carl Lewis in the long jump (1984-96) and fellow American Al Oerter in the discus (1956-68).