Everton produced a battling display against Villarreal but it could not stop them losing in their third round, first-leg Champions League tie.
The home side fell behind against the run of play when Luciano Figueroa powered in a precise angled shot.
James Beattie equalised when his own header fell into the Villarreal box and he quickly pounced to flick in a shot.
Josico's diving header put the visitors back in front and they kept Everton at arm's length to secure victory.
A huge wall of sound had greeted both sides and the thunderous noise from the home fans helped inspire Everton to a dynamic start.
The Goodison Park side quickly closed down and robbed Villarreal of any time and space to play their dangerous passing game.
Kevin Kilbane combined well with Alessandro Pistone on the Everton left after six minutes and delivered a threatening cross from which a Beattie effort was saved.
But, with Villarreal on the back foot, Everton could not turn their dominance into clear-cut chances and paid the price.
Former Birmingham striker Figueroa (left) celebrates his opener for Villarreal
A sliderule pass by Marcos Senna was played into the path of former Birmingham striker Figueroa and he finished with aplomb.
Tim Cahill headed just over at the far post for the home side, whose fans were sent into raptures when Beattie levelled after 43 minutes.
He benefited from an excellent cross by Phil Neville and, after Beattie could only lob an initial header into the air, he reacted quickest to get a foot to the loose ball and shoot past keeper Mariano Barbosa.
But the celebrations were shortlived as Josico restored Villarreal's lead from Juan-Pablo Sorin's cross.
Everton started the second half in similar vein to the first and again failed to turn their attacking play into goals.
And they were almost punished, only for ex-Manchester United hitman Diego Forlan to produce a tame far post header which was blocked.
Everton boss David Moyes sent on strikers Duncan Ferguson and Marcus Bent and the move almost reaped immediate dividend.
Bent was given a sniff of a chance but desperate defending denied him a shot on goal.
A late Everton surge failed to materialise and they now face a tough task when they travel to Spain for the second leg on 24 August.
Everton: Martyn, Hibbert, Yobo, Weir, Pistone (McFadden 80), Cahill, Arteta, Neville, Davies, Kilbane (Ferguson 62), Beattie (Bent 63).
Subs Not Used: Wright, Kroldrup, Li Tie, Osman.
Goals: Beattie 42.
Villarreal: Barbosa, Rodriguez, Quique Alvarez, Javi Venta, Arruabarrena, Riquelme, Josico, Senna, Sorin (Pena 89), Forlan (Guayre 85), Figueroa (Tacchinardi 65).
Subs Not Used: Lopez Vallejo, Hector Font, Kromkamp, Valencia.
Booked: Forlan, Figueroa, Rodriguez, Riquelme.
Goals: Figueroa 27, Josico 45.
Ref: Tom Ovrebo (Norway).