"I was going to come out here, compete my hardest and give it my all and I actually ended up playing an unbelievable match."I'm lost for words. It's honestly crazy."
Raonic was clearly rusty in his first singles match since October last year, making 18 costly unforced errors to just one.
De Minaur capitalised handsomely to set up a clash with another teenager, Saudi Arabian-born American qualifier Michael Mmoh, who upset Germany's Mischa Zverev earlier on Wednesday.
It will be his first ATP quarter-final appearance.
The Spain-based Sydney product had already caused a first-round boilover in beating American Steve Johnson and looked in the mood to add an even more impressive scalp to his collection.
He thumped his chest after breaking former world No.3 Raonic in the third game and defended three break points of his own to take the first set at Pat Rafter Arena.
Raonic, the 2016 champion in Brisbane, was shellshocked by De Minaur's ability to consistently return his booming serve.
He mounted a late resistance by breaking De Minaur for the first time in the match in the eighth game of the second set but couldn't hold him out, with the youngster needing only one match point to notch the upset.
It's an unexpected roadblock for Raonic, who battled wrist and calf problems in an injury-riddled 2017 and arrived in the country before Christmas to give himself a long lead-in to the Australian Open.
De Minaur booked himself a spot at the grand slam by winning the wildcard playoff at the end of last year and is on six-match winning streak.
- AAP