The British No1 was looking to build on her run to the fourth round of at Indian Wells but lost 6-3, 3-6, 6-2 against Andreescu, who also won the US Open as a teenager.
Raducanu was out of sorts early on as she lost the first set but she raised her game to win the second set and force a deciding set against a player ranked 41 places above her.
Andreescu ultimately proved too strong and too consistent as she won the last four games to secure victory in a gripping contest.
“Emma played amazing,” said Andreescu. “She is an incredible player and I have a lot of respect for her and her results show how good she is.
“You never know what you are going to expect,” on court. “I just wanted to play my best with what I had today and I think I did that.
“I didn’t let my negative emotions get the best of me. I was very energetic, positive and I just never gave up and that was the key today.”
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