Portugal suffered their first defeat of the Nations League campaign after Haris Seferovic scored the winner in a 1-0 victory for Switzerland in Geneva.
Switzerland had lost all three of their Group A2 fixtures, including a 4-0 hammering in the reverse fixture, but took the lead through Seferovic inside the first minute.
Fernando Santos' side were repeatedly denied by Swiss goalkeeper Jonas Omlin in search of an equaliser, with the absence of the injured talisman Cristiano Ronaldo particularly noticeable for the visitors.
Defeat left Portugal a point behind Spain at the summit of the group, while Switzerland picked up their first win to move one point behind Czech Republic in third.
Switzerland raced out the blocks as Seferovic headed into the bottom-left corner from Silvan Widmer's right-wing cross after just 55 seconds – the fastest goal in Nations League history.
The hosts thought they had a penalty 13 minutes later for a Nuno Mendes handball, but a lengthy VAR check ruled the spot-kick out for an earlier Nico Elvedi foul on Andre Silva.
Omlin kept his side ahead by denying a close-range Danilo Pereira header, before Rafael Leao headed home shortly after, only to be ruled out for offside.
Omlin also stopped a low Andre Silva drive after the interval, while Remo Freuler drilled just wide at the other end.
Seferovic almost extended Switzerland's lead but arrowed narrowly off target on a rapid counter-attack before Omlin beat away a swerving Bernardo Silva long-range strike.
The Montpellier stopper carried on his fantastic performance by pushing away a sliding Goncalo Guedes effort and a low Diogo Jota header as Switzerland held on for victory.
What does it mean? Portugal's top-spot hopes dented
Portugal were arguably fortunate to snatch a draw in their Nations League opener with Spain, but then recorded convincing victories over Switzerland and Czech Republic.
However, they came unstuck in Geneva and were largely off the pace, handing Spain the advantage in Group A2.
With only one team progressing, Portugal may end up needing to beat Spain on the final matchday in September.
Not only was Seferovic's smart flick to open the scoring the fastest goal in Nations League history, but it was also Switzerland's earliest goal since 1988.
The striker became the first Swiss player to score in the first minute of a game in 34 years, since Alain Sutter managed to do so in World Cup qualifying against Luxembourg.
Andre Silva was tasked with leading the line in the absence of Ronaldo, but failed to leave his mark against Elvedi and Manuel Akanji.
The RB Leipzig striker was caught offside on a game-high two occasions, the first in the build-up to Leao's disallowed header, and made just 15 passes all match.
Portugal are not in action until a Nations League away clash at Czech Republic on September 24, when Switzerland also visit Spain.