The German's win in three sets on Thursday condemned Williams to her earliest exit at a Grand Slam since the American turned professional in 1997.
"It's unbelievable," said Kerber. "I had great memories from last year and the match was so tough and so close.
"Venus won so many Grand Slams and I'm so happy to beat her in New York. It's an amazing feeling to play here in a night session."
Up next for Kerber is a third-round encounter with Belarusian Olga Govortsova.