The new Napoli striker made the difference as Argentina grabbed an away win in an entertaining friendly.
The Napoli striker troubled the Italy defense on several occasions and deservedly finished the evening with a goal and an assist before being replaced after 60 minutes.
He grabbed the first goal of the night in the first half after a terrific pass from Erik Lamela before supplying an accurate pass into the path of Ever Banega to double the advantage just after halftime.
Lorenzo Insigne grabbed a consolation for Italy with a terrific curling effort with 15 minutes remaining, but the home side could not find an equalizer.
Italy was without Mario Balotelli, who missed the game through injury, with Roma striker Pablo Osvaldo replacing him, while Daniele De Rossi started the game in the center back role for the home side.
Alejandro Sabella's side had injury woes of its own with Barcelona star Lionel Messi unavailable. His absence gave 21-year-old Roma winger Lamela the opportunity to showcase his talent.
The away side made the brighter start with Higuain looking particularly threatening in the opposition box. He had a shooting opportunity as early as the third minute but his tame effort was easily held by Gianluigi Buffon.
Italy was struggling to find a rhythm and only had a blocked effort from an Emanuele Giaccherini strike to show for its efforts in the opening 15 minutes.
And the slow start was deservedly punished five minutes later. Marco Verratti gifted possession to Lamela 35 yards from Italy's goal and his pinpoint pass with the outside of his boot found Higuain in the box. The Napoli striker cut inside De Rossi to fire past Buffon.
Antonio Candreva was becoming a real thorn in the Argentina defense, first delivering a cross that just evaded Pablo Osvaldo's outstretched boot before a teasing ball into the box was met by Claudio Marchisio, who inexplicably mis-kicked his effort straight to goalkeeper Mariano Andujar.
Lamela was surprisingly withdrawn at halftime to be replaced by Banega, but the decision was almost immediately justified with the substitute doubling the advantage in the 49th minute.
Higuain picked up the ball on the left-hand side of the box and laid into the path of the onrushing Banega, who took one touch before striking firmly across Buffon into the left-hand corner.
Buffon was replaced in the 55th minute by Federico Marchetti and the goalkeeper was called into immediate action to make a fantastic double save. Higuain pounced on a loose ball in the box that was parried into the path of Palacio, who only had to guide into the empty net but was denied by a stunning recovery save from Marchetti.
Italy then had the ball in the back of the net in the 68th minute when Alessandro Diamanti's free-kick was well saved by Andujar. The rebound was eventually put in by Alberto Aquilani but the linesman raised his flag for offside.
But with 15 minutes remaining, the home side did reduce the deficit when Insigne hit a sublime curling effort into the top right-hand corner from 20 yards.
Italy continued to push for the equalizer but it once again had Marchetti to thank as he produced a stunning save from Fernandez's bending shot in the 89th minute.
Argentina now heads into a World Cup qualifier with Paraguay in September full of confidence, while Italy will take heart from a spirited performance as it hosts Bulgaria and the Czech Republic in the same month as it looks to seal qualification to Brazil in 2014.