The UEFA Champions League winner was stunned at California's Rose Bowl, with Igor Jesus's 36th-minute strike the difference between the two sides in Group B.

Indeed, Botafogo's win over PSG is the first victory by a South American team over a European team in the FIFA Club World Cup – including previous formats – since Corinthians beat Chelsea in the 2012 final.

After scoring in the first haf, the Brazilian outfit was able to hold on to seal a famous victory, becoming the first team to stop PSG scoring in a competitive fixture in 19 matches, when it was beaten 1-0 by Liverpool in the first leg of its UEFA Champions League Round of 16 clash. 

"Surprised, no. We knew it was going to be a tough, very close game. Botafogo defended very well," Luis Enrique said after the match.

"Botafogo is the team that has defended best against us this season, whether in the league or in the [UEFA] Champions League.

"We had the opportunity to score, but we didn't, and the match became more difficult. We know the difficulties of this competition.

"We have to think about the last game (against Seattle on Monday). It's a very short competition, you can be out quickly. There can be a three-way tie in our group. No one can know who will pass, the group is open."

PSG had outscored its past three opponents by a combined score of 12-0 heading into the game, winning the Coupe de France and the UEFA Champions League final along the way.

Despite the defeat, Luis Enrique insists that his team is capable of progressing to the next round of the competition.

"If there's one team that can turn a situation around, it's ours. And there aren't many of them. In terms of attitude, we were very good," he added.

"The result should not erase everything. We have to look at what we did well and what we can improve. For example, we conceded more transitions than in many matches.

"But in these tournaments, you have to perform well in the key moments. We weren't."

Brazil's four teams at the 32-club tournament are unbeaten so far and Botafogo boss Renato Paiva said it showed the strength of the game in the South American nation.

"I think it's the quality of Brazilian players, the quality of what people are doing in Brazil, especially the coaches," he said. "Brazil will always be Brazil in world football."

Luis Enrique's team was dominant in the match, but only two of its 16 shots were on target and its 74.6 per cent of possession meant little in the contest.

Botafogo, meanwhile, saw all four of its efforts test Gianluigi Donnarumma in the PSG goal, but the Italian could do nothing to stop Jesus's deflected strike from finding the back of the net nine minutes before half-time.

PSG thought it had levelled the game in the 79th minute when Bradley Barcola, who has been linked with a move to Bayern Munich this summer, found a way past Botafogo goalkeeper John, but his goal was ruled out for offside.

Meanwhile, in the other Group B fixture, Atletico Madrid responded to a 4-0 defeat to PSG with a 3-1 victory over Seattle Sounders, helped by Pablo Barrios's brace.

Barrios sensationally curled Diego Simeone's side into an 11th-minute lead after smashing Giuliano Simeone's cutback into the net, which cannoned the crossbar on its way in.

Atletico doubled its lead two minutes after half-time when Marcos Llorente's stunning drive from distance was tipped onto the crossbar by Stefan Frei, only for the rebound to fall to Robin Le Normand, who squared the ball for Axel Witsel to head home.

Albert Rusnak halved the deficit three minutes later, only for Barrios to restore Atletico's two-goal lead in the 55th minute with another well-taken finish into the right corner.

The results from the penultimate round of fixtures in Group B left it wide open as to who will progress into the next round heading into the final matchday.

Botafogo's victory over PSG puts it three points clear of Luis Enrique's side, which is level with Atletico in the standings after the first two group games.

Atletico faces Botafogo on Tuesday (AEST), and knows it must beat its opponent by three goals to advance, with the Brazilian side in pole position to progress in top spot.

Simeone's team could pick up a point and hope for a PSG defeat against the winless Sounders, but the European champion will be out for all three points to ensure a spot in the last 16.