Sascha Molders struck after 33 minutes to hand Augsburg a vital victory in their battle for European football – and their first win over Bayern in 54 years.
It’s Bayern Munich’s first league defeat since October 2012 when they lost 2-1 at home to Bayer Leverkusen.
The German champions dropped two points at home to Hoffenheim last week and continued to field some reserve players with Pep Guardiola handing Pierre-Emil Hojbjerg and Ylli Sallahi their first league starts. Mitchell Weiser, also just 19, started at right-back.
Bastian Schweinsteiger and Javi Martinez - who are suspended for the second leg of the Champions League quarter-final against Manchester United - also started, but it was largely a second-string Munich side.
Manuel Neuer – who was a late returnee after Tom Starke picked up an elbow injury – was forced into an early bit of work as Matthias Ostrzolek whipped a superb left-footed drive across his goal only for the German to clip wide.
This sixth Bavarian derby between the sides was competitive and combative as Augsburg looked to press high-up the pitch – the template for making life hard for Bayern in the Bundesliga this season.
Moments later, the home side were in the lead. Daniel Baier dispossessed Toni Kroos and stormed from midfield, setting up Molders and the striker finished with his left-foot into the net for his second of the season.
Augsburg were looking capable on the counter-attack and had no hesitancy in committing men forward from deep areas – even without the two strongest forward players Tobias Werner and Andre Hahn who were out injured.
Seven minutes before half-time, Verhaegh sparked another counter-attack and the end touch from Molders saw the ball go straight into Neuer’s arms.
Guardiola was less than impressed at the break and introduced Mario Gotze to replace the ineffective Swiss attacking midfielder Shaqiri.
The champions should have levelled around 100 seconds into the second half when Sallahi pounced on Verhaegh’s mistake, crossing high towards the back-post for Mandzukic who nodded the ball wide.
Augsburg sparked into life six minutes after the break with Alexander Esswein testing Neuer on a gut-busting run up the field, on his own, shooting from inside the area.
On 58 minutes, Jeong Ho-Hong tugged back Hojbjerg who was about to race through on goal, but the referee Manuel Grafe showed only a yellow card to Bayern’s frustration – the correct decision, though, as there was no clear goalscoring opportunity.
Guardiola was quick to delve into his excellent substitutes bench for a second and third time with Thomas Mueller and David Alaba coming on around the hour mark.
Alaba allowed the game to be stretched on the left; yet there was few chances for Bayern Munich to draw level. Only a right-foot strike from the Austrian full-back which hit the post caused a degree of panic among the Augsburg supporters.
In stoppage time at the other end, though, the home side struck the woodwork as Esswein laid off to Raul Bobadilla who was desperately unlucky to rounding off with a second goal.
However, it finished a surprising 1-0 for Augsburg and Bayern go into Wednesday’s second leg against Manchester United having won none of their last three matches in all competitions.