Australia's world No.1 Ashleigh Barty also headlines a blockbuster Monday schedule.
New generation male stars such as Stefanos Tsitsipas and Matteo Berrettini are also in action.
Women stars such as Petra Kvitova, Madison Keys and Sloane Stephens are playing too.
Some of the key singles fixtures on Day 1
Women's singles: Anastasia Potapova vs Serena Williams, Madison Keys vs Darla Kasatkina, Johanna Konta vs Ons Jabeur, Sloane Stephens vs S Zhang.
Men's singles: Denis Shapovalov vs Marton Fucsovis, Matteo Berrettini vs Andrew Harris, Feliciano Lopez vs R Bautista Agut, Steve Johnson vs Roger Federer, Stefanos Tsitsipas vs Salvatore Caruso, Jan-Lennard Struff vs Novak Djokovic.
My expectations are quite low, says Federer
Federer doesn't have much expectations, "Practice has been going well. I hope it's enough. I know it's a super long road to victory. My expectations are quite low," he said.
Djokovic, who helped Serbia win the inaugural ATP Cup, claimed, ""It was phenomenal couple of weeks and great leadup to Australian Open. But it did take a lot out of me."
Federer and Djokovic in pursuit of these records
Swiss ace Federer is within just three victories of his 100th win at the Australian Open and holds a 97-14 record here. Meanwhile, if second seed Djokovic beats Struff, he will become the sixth player in the Open Era to reach 900 tour-level wins.
Serena and Barty chasing history
Serena is chasing a record-equaling 24th singles Grand Slam title.
She last won a Slam while being eight months pregnant.
Since her return, Serena has has reached four Grand Slam finals, however, she has fallen short on each occasion.
Meanwhile, women's world number one Barty is bidding to become the first home champion in 42 years.
Wozniacki playing her final event before retirement
Former world No.1 Wozniacki is playing her last event before retirement.
The Dane admitted playing for the last time at the site of her sole Grand Slam victory will be emotional.
"I'm out here, and I love the sport, I love everything that it's given me," Wozniacki said.
"I love being out there and competing, but I'm ready to start a new chapter."
Key details about the tournament
The tournament will run from January 20 to February 2. The winner of both the men's women's singles will receive a prize money of $4,120,000. There are 128 women and men with 32 seeds each in the singles event. The champions will get 2,000 points.