Chen, 19 and juggling training with courses at Yale University, produced a series of clean, crisp quad jumps in his playful and energetic routine that brought a rousing reaction from the audience at Japan's Saitama Super Arena.
"I felt great going up in the air, in the air, felt great and coming down," said Chen, a three-time U.S. champion who took 107.40 points for a season-best score, outstripping compatriot Jason Brown by more than 10 points.
"At the same time I am really happy with how I skated today. It's not a reflection of any other skaters, but I'm just happy with the way I skated."
Brown, 24, was a surprise second with a fluid, clean performance that bucked current trends in men's skating by not including even one quad jump.
"It feels amazing," said Brown, who switched coaches this season to join Hanyu and Russian skater Evgenia Medvedeva under Canadian Brian Orser and whose eyes widened when his score, 96.81, came up.
"For my free skating I have the same goals that I had before, I just want to give it a try and I would like to put out another personal best."
Japanese idol Hanyu, who returned to the ice after a four-month break from competition due to an ankle injury, performed a compelling but flawed skate that saw him double his planned quad Salchow.
"I couldn't concentrate. After I missed my first jump, my mind went blind. I guess I was a bit rushed for the first jump," the 24-year-old said.
Hanyu staged a comeback for the 2018 Pyeongchang Winter Olympics after another ankle injury that kept him from practicing jumps until just before the Games, and fans are hoping for a similar miracle this time.
"I have a lot of experience in this type of environment despite not competing for the last few months, and I am not happy about the fact I couldn't perform at my best for the short programme. What I can do from here is to fix my mistakes and rest well," he said.
Pairs Triumph
Earlier on Thursday, China's Olympic silver medallists Sui Wenjing and Han Cong took the pairs skating crown after a breathtaking free skate.
Despite a season blighted by injury, the 2017 world champions skated a lyrical, moving programme for a season's best 155.60 (234.84 combined), drawing a packed crowd to its feet with their clean jumps and gorgeous lifts.
"This has been a difficult year for us, we've had injuries and other issues," said Sui, who laughed as Han pumped his fists at the end of the routine.
"But our coaches and team gave us support that we were able to turn into strength."
Russians filled out the rest of the podium with second place going to Evgenia Tarasova and Vladimir Morozov after a regal but mistake-marred programme that included the latter putting his hand to the ice in the wake of their Triple toe loop.
