Scotland's Euro 2008 champagne was put back on ice after they slumped to defeat in their new claret strip by a Georgia side fielding three teenagers.
Georgia were the ones celebrating against Scotland in Tbilisi
Georgia went ahead after 16 minutes, when 17-year-old Levan Mchedlidze headed powerfully home.
Scotland's James McFadden appeared to be denied a penalty, but David Siradze poked in a second after 64 minutes.
However, the Scots' fate is still in their own hands with just one game remaining at home to Italy next month.
Shaun Maloney and Graeme Murty had been surprise starters for the injury and suspension-hit Scots in Tbilisi.
Maloney was in midfield along with the fit-again Darren Fletcher.
Murty was brought in at right-back, with Graham Alexander switching to the left, after Gary Naysmith failed a late fitness test.
Georgia coach Klaus Toppmoller, whose side had no chance of qualifying, handed a debut to 17-year-old goalkeeper Giorgi Makaridze, who has yet to play for Dinamo Tbilisi.
Levan Kenia, a 16-year-old with Schalke 04, was also in central midfield, with Empoli's Mchedlidze up front for a Georgia side themselves without several key players.
Yet the home side dominated possession early on as they looked to expose Scotland with their youthful pace.
Scotland did create the first chance, McFadden meeting a low Kenny Miller cross but sending his flick into the side-netting from the edge of the six-yard box.
However, Georgia went ahead when Zurab Menteshashvili swung in a corner and Mchedlidze beat Stephen McManus to head home from 10 yards.
James McFadden's recent goalscoring feats came to an end
McManus headed over from a similar position following a McFadden corner, before which David Weir had been pushed to the ground by Siradze.
Referee Knut Kircher simply chose to tick off both players.
And the German denied an even more clearcut penalty claim after 34 minutes, when Zurab Khizanishvili appeared to upend McFadden.
Georgia immediately returned to the other end and a stinging 25-yard free-kick from Mchedlidze forced goalkeeper Craig Gordon to palm the ball clear at full stretch.
A McFadden pot shot from 20 yards flew just over and landed on the top of the net, but half time was reached without Georgia's young goalkeeper being seriously tested.
That was how it continued after the break, despite Scotland dominating possession.
And, just as manager Alex McLeish prepared to introduce strikers Craig Beattie and Kris Boyd, Georgia broke clear to go two ahead.
David Kvirkvelia beat Murty and his low cross was forced home by Siradze from eight yards.
Beattie headed over when found in a good position at the back post, while McFadden forced the goalkeeper into a save then scuffed an effort from just five yards.
But Scotland's hopes of recording seven wins in a row for the first time in 80 years were ended and their qualification hopes delivered a serious blow as Georgia held out to claim victory.
Georgia: Makaridze, Shashiashvili, Asatiani, Salukvadze, Khizanishvili, Kankava, Menteshashvili, Kenia (Kandelaki 79), Kvirkvelia, Siradze (Jakobia 89), Mchedlidze (Kvakhadze 85).
Subs Not Used: Sturua, Tatanashvili, Bolkvadze, Dolidze.
Booked: Kankava, Asatiani.
Goals: Mchedlidze 16, Siradze 64.
Scotland: Gordon, Murty, McManus, Weir, Alexander, Fletcher, Ferguson, Pearson (Boyd 66), Maloney, Miller (Beattie 66), McFadden.
Subs Not Used: Marshall, McEveley, Dailly, Robson, Teale.
Booked: McManus, Beattie.
Ref: Knut Kircher (Germany)