His success came as U.S. figure skaters got off to a strong start in the event, with all three U.S. entries on the ice Friday setting personal best scores.
Chen took top spot in the men's short program with 111.71 points.
Madison Hubbell and Zachary Donohue led the ice dance field, which also included the 2021 world champions from the Russian Olympic Committee team.
Meanwhile, Alexa Knierim and Brandon Frazier placed third in the pairs short program behind two world champion teams.
After taking bronze at the past two Olympics, the U.S. has pushed itself into first position through the first three of eight total segments in the competition.
In a post-skate interview with NBC's Andrea Joyce, Chen, 22, said he was "just here to have fun."
"I was able to do that, so I’m just really happy," he said.
While the figure skater appeared nonchalant over his victory, his performance marked a turning point from his experience at the 2018 PyeongChang Olympics, where he placed fourth in the team event's short program, later placing 17th in the singles competition's short program.
This time, Chen delivered a technically flawless performance, which was marked by two quads and a triple Axel as he glided across the ice to Charles Aznavour’s version of “La Boheme."
Questioned about his whereabouts on Thursday, Japan's Chef de Mission Hidehito Ito said: “I don’t think he has been at the (competition) venue, is the only thing I can say," according to NBC Olympics.
Chen was born in Salt Lake City, which was home to the 2002 Winter Olympics. As a child, he performed gymnastics and played hockey, but was inspired after seeing Olympic legends like Michael Phelps and Apolo Ohno compete, according to NBC Olympics.
“Almost every Olympian is inspiring,” Chen has previously said. He also reflected on how he had "always wanted to be in the Olympics."
“I remember watching figure skating on TV during the 2002 Olympics, and I remember going to the rink and pretending to be in the Olympics," he said.
When the team event picks up again on Saturday night U.S. time, with the women's short program and men's free skate, the U.S. will carry a two-point lead over the Russian Olympic Committee team at 28 points to 26.
China, meanwhile, is five points behind at 21 while Japan is at 20, leaving both countries vying for third place.