Brunson (18-5) rocked Machida with a left hand in the pocket and put him to sleep with follow-up punches on the ground. The fight, which headlined UFC Fight Night in Sao Paulo, Brazil, was waved off at the 2:30 mark,
It was Machida's first appearance since June 2015. Machida, 39, accepted an 18-month suspension in 2016 for taking a banned substance. The UFC immediately booked him to a main event once the suspension ended, but it turned into Brunson's night.
"I got up for this fight," Brunson said. "Lyoto is never going to lose his skills. He might lose his timing, speed, cardio, but he'll never lose his skills. To come out and get a win over a guy like that, I feel incredible right now.
"Luke Rockhold, what's up baby? Where you at? Let's run this."
It was a fast finish after a pretty slow start to the fight.
Machida (22-9) is known for cautious, calculated starts, and that was the case Saturday. Machida circled away from Brunson and hesitated to engage. According to Fightmetric, he attempted just nine total strikes, none of which landed cleanly.
Brunson, of Wilmington, North Carolina, did well slipping Machida's blitzes and shook his head each time the Brazilian charged in.
It is the seventh first-round finish of Brunson's UFC career. His overall record in the Octagon is 9-3. His most recent loss came via decision to Anderson Silva in February in a fight many observers felt Brunson won.
Machida has now lost three in a row for the first time in his career.
Covington takes Maia out in enemy territory
Covington (13-1) talked a lot of trash during fight week but backed it up inside the cage. He suffered a cut near the corner of his right eye early but was otherwise dominant, stuffing Maia's takedown attempts and hurting him on the feet.
It wasn't the most technical performance by Covington, who fights out of American Top Team in Florida, but it was physical and high-paced. The former Pac-10 collegiate wrestling champion had promised an aggressive game plan against Maia.
After the fight, Covington, who ran his win streak to five, called out current champion and former teammate Tyron Woodley.
"I should have knocked him out," Covington said of Maia. "Brazil, you're a dump. I got one thing to say: Tyron Woodley, I'm coming for you. If you don't answer the front door, I'm knocking it down."
It was Maia's (25-8) second loss in as many fights. He previously came up short in a championship bid against Woodley at UFC 214 in July.