World No 20 Lisicki, the 2013 Wimbledon beaten finalist, lost 6-2 6-7 (3-7) 7-6 (7-3) to the world No 98 from Barcelona on Wednesday.
Arruabarrena gained revenge for her defeat in the pair’s only other meeting, when she lost in the second round of the French Open in 2011.
Germany’s Carina Witthoeft breezed through her match, though, as she beat Evgeniya Rodina in straight sets 6-1 6-2.
And qualifier Yulia Putintseva mounted a late comeback against Holland’s Kiki Bertens after winning the final five games of the deciding set.
The world No 105 was 5-2 down before rallying to win 6-4 5-7 7-5 against the 23-year-old Bertens in just under three hours of action.