In the biggest upset in Crucible history, the five-time world champion – who has lifted five titles this season – crashed out 10-8 against the 23-year-old from Blackpool.
Trailing 5-4 overnight, O’Sullivan battled back to 8-8, but could not prevent suffering a first-round exit - the last time he fell at the first hurdle was in 2003 - in Sheffield.
Cahill said: “I believe I can beat anyone on the day. I thought I was going to fall over at one point.
“I thought I’d be nervous when I went out there today but I wasn’t. I was a bit tense in parts but I think I have shown quite a bit of bottle. It was nice to qualify and it was nice to beat Ronnie.”
Resuming this morning, O’Sullivan quickly levelled at 5-5 after an impressive 97 break, failing to clinch an opening century after missing the final red.
He looked set to take the lead in the next frame, rattling off 48, before allowing Cahill in, and he cleared with 84 to edge back in front. O’Sullivan was struggling, as Cahill eked out the next two frames to lead 8-5.
But the five-time world champion scrambled back as breaks of 104 and 89 helped to restore parity once again at 8-8. Cahill opened with 62 in frame 17, but when he missed an easy red to the corner, O’Sullivan looked set to pinch the frame. But on 53, he ran out of position on the pink, and the Blackpool potter cleared the final two balls.
And when O’Sullivan suffered a piece of misfortune - inadvertently knocking in a red, after potting the blue on a break of 42 - the finishing line was in sight for Cahill, a 52 clearance securing a second-round meeting with Scotland’s Stephen Maguire.
O’Sullivan admitted he was feeling under the weather.
“My limbs are feeling very heavy. I have no energy,” he said. “You come here and try to do your best but if you’re physically not 100 per cent it’s just one of those things.
“I tried to hang in there and get through this match and have a few days off before my next match.
“There are two ways of looking at it. One is, he has come here and played brilliantly. But I also left him some easy chances.”