After three false starts cut the field from nine to six, Gay lost ground at the start and strained to catch Mullings at the tape, with the Jamaican given the victory despite clocking the same 10.26 seconds as Gay in strong headwinds of 3.4 metres per second.
"I knew Tyson has got a strong finish," said Mullings, who ran 9.80sec to win the Diamond League's Prefontaine meet. "I just have to get out of the blocks strong."
Gay, who surprised himself by running the season's best 9.79sec in his first race at a low-key meet last week in Florida, said he was not hampered by a hip injury that has affected his training. "I was just a little bit sluggish," Gay said about his start. "I haven't been able to really push in practice."
The defeat was Gay's first in the 100m since September 2009 when he lost to Jamaica's Asafa Powell in Brussels. The race was delayed with Richard Thompson of Trinidad and Americans Travis Padgett and Rae Monzavous Edwards all disqualified for false starts. The meeting on Randall's Island in the East River, across from the Manhattan skyline, was held under a heavy overcast sky and light rain, and the dreary conditions held down performances in the sixth stop of the 14-event premier series.
Two-time women's world high jump champion Blanka Vlasic of Croatia was also beaten, as Sweden's Emma Green Tregaro won with a jump of 1.94m while 2010 World Athlete of the Year Vlasic only cleared 1.90m.
Three-times world champion Allyson Felix restored order in the women's 200m by winning in 22.92, gliding to the finish ahead of fellow Americans Bianca Knight (22.96) and Shalonda Solomon (23.03).
The women's 100m hurdles was won by American Danielle Carruthers in 13.04, with compatriot Kellie Wells second in 13.06sec followed by Briton Tiffany Ofili-Porter in 13.11sec. Briton Jessica Ennis, the heptathlon world champion, was seventh in 13.27sec. "Tough conditions," Ennis said.
The most exciting finish was produced by Puerto Rican Javier Culson in the 400m hurdles as he leaned through the tape and sprawled onto the track to beat American Bershawn Jackson by five-hundredths of a second in 48.50sec. Former Olympic champion Jeremy Wariner won the 400m in 45.13sec, edging Jamaican Jermaine Gonzales (45.16sec) and Rondell Bartholomew of Grenada (45.17sec) at the tape.
"It would have been something like 44-mid in better conditions," said Wariner. "With better conditions, I would have run a season's best."
South African Oscar Pistorius, the double amputee striving to run 45.25sec to reach the Olympic "A Standard" for qualifying, finished fifth in an eight-man field in 45.69sec, just eight-hundredths of a second off his personal best.
Pistorius may have came up short of his dream result but the South African wore a big smile afterwards.
"With my ranking I should have come eighth in this race," said Pistorius, who has fought a long legal battle to compete against able-bodied athletes.Pistorius, whose personal best is 45.61sec, added: "I didn't think I ran 45. That's my second quickest time, very close to my personal best. It shows I'm on the right course. I think the season is going to go better and better."
Pistorius, who runs on springy prosthetics, overcame a Lane 1 assignment in addition to the wet conditions at Icahn Stadium.
"I've gotten a lot better in the rain," said the South African, who used to struggle in wet conditions. "Now I train when it rains. Whenever it rains back in South Africa, I train. In the rain, you have a lot less grip. You may not be able to plant your feet as far forward."
Wariner, who has two Olympic 4x400m relay golds to go with his 2004 Olympic 400m title, paid tribute to Pistorius, saying. "It's tough for anybody in Lane 1. He (Pistorius) has a lot of heart and a strong will to do what he wants. He's a big inspiration to anyone."