Looking in good shape and highly mobile, she eased past Sweden's Rebecca Peterson 6-4, 6-2 to make the second round of the Italian Open in Rome.
On a windy day, Williams fell behind 3-1 in the opening set but rebounded to run away with the first set 6-4 before comfortably winning the second set 6-2.
Serena, 37, has not played since a hard-fought three-set win over Petersen in the second round at the Miami Open in March before withdrawing with a knee injury.
Williams, a 23-times Grand Slam singles champion, has finished runner-up at two of the last three majors but been unable to add to her tally since returning to the sport following the birth of her first child in 2017.
Venus, the 1999 champion, later edged out Belgium's Elise Mertens 7-5, 3-6, 7-6. It will be their first head-to-head meeting on European clay since 2002, that was the final of the French Open.
"It was really cool to share my favourite city with her, some of my favourite things to see".
"I haven't been able to train or practice a lot".
Seemingly in control, the 38-year-old Venus led in the third 5-1 then serving for it at 5-2 she blew six match points, a few off double faults.
"It was a very long match", Venus said. "I vaguely remember that, so I don't really remember". 'It's been bad. I've been working as hard as I could keeping up my cardio as much as I could with a knee injury'.
Former world number four Dominika Cibulkova, won her match 6-2, 6-3 against Aliaksandra Sasnovich, and next meets US Open and Australian Open victor Naomi Osaka of Japan. "I knew that I love the clay season and I wanted to be a part of it".
In other action, 13th-seeded Borna Ćorić rallied past Felix Auger-Aliassime 6-7 (4), 6-3, 6-4 in a clash of two of the top young players on tour.
Among other matches, Great Britain's Johanna Konta was a 6-4, 6-1 victor over Alison Riske; Spain's Garbine Muguruza beat China's Saisai Zheng 6-3, 6-4, and Victoria Azarenka of Belarus knocked off China's Shuai Zhang 6-2 6-1.
Spanish qualifier Albert Ramos-Vinolas eliminated Gael Monfils 6-3, 6-1; and Denis Shapovalov beat Pablo Carreno Busta 6-3, 7-6 (5).
Other results included Anett Kontaveit, Dominika Cibulkova and Garbine Muguruza all advancing.