Portuguese club Braga topped Liverpool, 1-0, in the first leg of the UEFA Europa League Round-of-16 on Thursday at AXA Stadium.
With the loss, English Premier League side Liverpool sees its 13-match European unbeaten run come to an end.
Osorio Costa Silva Alan scored the game's lone goal after an 18th minute penalty earned by Marcio Jose da Costa Mossoro, who was taken down by a Sotirios Krygiakos' tackle.
EPL side Manchester City also fell in the first leg, 2-0 to Dynamo Kyiv.
Andriy Shevchenko and Oleg Gusev scored on each side of the half to give Man City a huge hill to climb in the second leg next week.
In other Europa League action on Thursday, it was: FC Porto 1, CSKA Moscow 0; Rangers 0, PSV Eindhoven 0; Villarreal 3, Bayer Leverkusen 2; Benfica 2, PSG 1; Spartak Moscow 1, Ajax 0; and Twente 3, Zenit 0.