The Norwegian sixth seed had no answers to the power and intensity of his opponent, who stormed past him 6-2, 3-6, 6-1, 6-4 on Margaret Court Arena for the biggest win of his burgeoning career.
Ruud fell victim to another of tennis's up-and-coming young brigade who are gunning to challenge the established order.
NextGen winner Joao Fonseca, 18, beat ninth seed Andrey Rublev on Tuesday.
A third teenager, American Learner Tien, who lost to Fonseca in the NextGen final, faces fifth seed Daniil Medvedev on Thursday.
"I feel great. Casper was playing really good from the beginning, it was really tough," said Mensik, who also played in the NextGen finals.
"After the second set when it was 1-1, I just tried to play the same, focus on my game.
"That was a key for me today because against a player like this, best of five sets is not that easy."
Ruud, who surged to a career-high two in 2022 when he made the French and US Open finals, said before the tournament he was eyeing a move back into the top five this season.
His other goal was playing better at Grand Slams, with that dream in tatters.