Last down the start ramp in Pamplona's historic Plaza del Castillo square, the Movistar team of defending champion Juan Jose Cobo completed the technical 16.5km course in a blistering time of 18 minutes and 51 seconds amid hefty cheers from the jubilant home crowd.
Twenty-five-year-old Castroviejo, riding his debut Grand Tour, took the leader's red jersey after finishing the strongest amongst his victorious team-mates.
Cobo, however, was distanced just before the line and lost a handful of seconds to Movistar's first riders.
Three teams - Rabobank, Omega Pharma-Quick Step and BMC - were tied for second place, 10 seconds off the late pace set by Movistar.
Despite setting the best time at the intermediate sprint, the Sky team of British hope Chris Froome slowed on the second section of the course, riding into the famous bullring in Pamplona to set the fifth best time at the finish, 12 seconds down.
Race favourite, the Spaniard Alberto Contador, led his Saxo Bank-Tinkoff Bank team over the line 15 seconds off the pace in seventh place on his return to Grand Tour racing following a six-month doping suspension.
The first team to start the opening test of the 67th Vuelta - local Pro Continental outfit Casa Rural - were tied at the bottom of the leader board alongside Garmin-Sharp, who saw four riders dramatically crash out on a patch of oil on a tight left-hand bend around two-thirds into the course.
Dutchman Thomas Dekker - riding his first Grand Tour since 2007 after a doping suspension - came off the worst and needed to be treated by doctors at the finish.
The American team struggled to regroup and finished 1:28 off the pace, tied on the bottom with Casa Rural. The local team was wearing a specially designed red-and-white skin-suit reflecting traditional bull runner gear to pay homage to their local town of Pamplona - famous for its San Fermin festival in which the running of the bulls is one of the main attractions.
While it was heartbreak for the unfortunate Garmin team of American youngster Andrew Talansky (one of five Garmin riders to remain upright), it was tight at the top for those who rode the demanding course well and without incident: just five seconds separated the teams from second to eighth place.
The evening time trial was raced in sweltering temperatures of 35 degrees Celsius and in front of an expectant crowd that included local cycling legend Miguel Indurain, born and bred in nearby Villava.
With Castroviejo wearing the red jersey for the first road stage of his first ever Grand Tour, the Vuelta continues on Sunday with a largely flat 181.5km stage two from Pamplona to Viana that passes through the Rioja wine region and should culminate in a bunch sprint.
Stage one result: Pamplona TTT
1. Movistar 18:51, 2. Rabobank +10, 3. Omega Pharma +10, 4. BMC +10, 5. Sky +12, 6. Lotto +12, 7. Saxo Bank +15, 8. Katusha +15, 9. Euskaltel +28, 10. Astana +32, 11. Ag2R-La Mondiale +33, 12. Vacansoleil +33, 13. Orica-GreenEdge +34, 14. Liquigas +43, 15, Cofidis +46, 16. Lampre +55, 17, RadioShack +55, 18. FDJ-BigMat +58, 19. Argos-Shimano +58, 20. Andalucia +1:01, 21. Garmin-Sharp +1:28, 22. Casa Rural +1:28