"Too Much Johnson" was originally intended to be shown as a prologue to a slapstick comedy at the Mercury repertory theatre in New York, but it was never finished.
Until staff at the Cinemazero art house cinema in Pordenone, Italy found the work print in a warehouse earlier this year, it was thought the only known copy was lost in a fire that gutted Welles' home near Madrid in 1970.
How it wound up in Italy "is still a mystery," said Kellie Fraver, spokeswoman for the George Eastman House museum of film and photography in Rochester, New York state, which announced its recovery on Wednesday.
What is known is that all but one of the reels were in relatively good shape - and the exception was brought back to life by experts in the Netherlands, without resorting to digital help.
The restored copy of "Too Much Johnson" will get its world premiere on October 9th at the Giornate del Cinema Muto silent-film festival in Pordenone, with a US premiere to follow a week later at George Eastman House.
"Holding in one's hands the very same print that had been personally edited by Orson Welles 75 years ago provokes an emotion that's just impossible to describe," said George Eastman House film curator Paolo Cherci Usai.
Best known for the 1941 classic "Citizen Kane" and, in 1938, the science fiction radio drama "The War of the Worlds," Welles was a co-founder of the Mercury Theatre. He died in Los Angeles in 1985 at the age of 70.