Champions League holders Liverpool and favourites Chelsea have been drawn in the same group for the first phase of this season's competition.
It is the draw neither English club would have wanted and they will also face Anderlecht and Real Betis.
Manchester United's biggest threat will come from Everton's conquerors Villarreal, while Rangers face Inter Milan and Porto in a tough group.
Arsenal have a relatively easy passage with Ajax their trickiest opponent.
Liverpool will host Chelsea in the second Group G fixture on Wednesday 28 September, while the Reds travel to Stamford Bridge to play the Blues in the final group game on Tuesday 6 December.
United's draw means that Villarreal striker Diego Forlan will face a return to his former club.
The Uruguay striker finished last season as top scorer in the Spanish league with 25 league goals, but only scored 10 goals in 62 Premiership games for United.
AC Milan, who Liverpool beat in the final in Istanbul in May, are in Group E along with PSV Eindhoven, Schalke and Fenerbahce.
Bayern Munich are the top-ranked German side, and will play Juventus, Club Brugge and Rapid Vienna in Group A.
Real Madrid, Lyon, Olympiakos and Rosenborg make up Group F, while Barcelona face Panathinaikos, Werder Bremen and Udinese in Group C.
Bookmaker William Hill has installed Chelsea as 5-1 favourites to win the competition, ahead of Barcelona (6-1) and AC Milan (7-1)
Manchester United are 10-1 with Arsenal at 11-1, while holders Liverpool are 22-1 to retain their title. Rangers are quoted as 80-1 to win the competition.
(Top seeds in bold, British teams in capitals)
Group stage begins 13/14 September.