Wales threw away a good start to slump to a disappointing Euro 2008 qualifying loss in Nicosia on Saturday evening.
Cyprus striker Yiannis Okkas (right) grabbed two goals against Wales
After Wales rode a tricky start, James Collins found space on the back post to side-foot home a Gareth Bale free-kick.
But Cyprus hit back with three goals after half-time, their task made easy by defensive lapses from free-kicks.
Yiannis Okkas claimed two close-range goals in a fine display, while a Konstantinos Charalampidis header from another set piece finished Wales off.
The defeat puts a huge dent in Wales' hope of claiming third place in Group D to earn a better seeding for future tournaments.
Wales arrived seeking a third successive away victory, a feat they had not managed for 26 years.
But it was Cyprus who started the brighter at the Neo GSP Stadium, as the home side made light of the injury-enforced absence of top striker Michael Constantinou.
Okkas, in particular, caught the eye as Cyprus channelled much of their attacking play through the Celta Vigo forward.
A looping header from Chrisou Paraskevas was shepherded wide by Wales goalkeeper Danny Coyne, while Efstathios Aloneftis had a 25-yard pile-driver charged down.
Collins, playing on the right of a three-man Wales central defence, in particular had struggled to deal with the lively Okkas.
But after a difficult opening period the West Ham man turned the tables as he put Wales ahead.
The Cyprus defence was drawn to the near post as wing-back Bale ripped across a free-kick from wide on the left, leaving Collins unmarked at the far stick to side-foot his first goal for his country.
A driving run from Konstantinos Makridis nearly brought Cyprus level as he outpaced Danny Gabbidon, but Coyne was out well to snuff the danger.
Then just before the break a dangerous Cyprus free-kick found Alexandros Garpozis free in the Welsh area, only for the midfielder to put his strong header straight at Coyne.
During the rearguard action goalscorer Collins fell awkwardly and was forced to limp off a minute before half-time, to be replaced by Craig Morgan.
Okkas had the ball in the back of the Wales net within two minutes of the restart, but the striker had strayed marginally offside and was denied by the assistant's flag.
Cyprus continued to press but nearly fell to a classic counter-attack as Joe Ledley's incisive pass sent Craig Bellamy through on goal.
The Wales skipper showed pace that belied the groin operation he underwent nine days ago and drew a full-stretch save from Antonis Georgallides.
James Collins scored his first Wales goal before Cyprus hit back
Wales manager John Toshack added further pace by putting Rob Earnshaw on up front in place of a subdued Freddy Eastwood.
But no sooner had the swap taken place than Cyprus equalised through dangerman Okkas.
A curled Aloneftis free-kick from the right should have been claimed by Coyne, but the Tranmere keeper was back on his heels as Okkas rose in front of him to power a header home on 59 minutes.
The nerves spread and Wales found themselves behind nine minutes later as Sam Ricketts and Morgan left a deep free-kick from Yiasoumis Yiasoumi to each other.
Aloneftis needed no second invitation on the back post to send the ball back across the area and Okkas smashed home his second goal from two yards.
A third Cyprus goal soon followed to end the visitors' hopes and again the cause was Wales going to sleep as a free-kick was curled in.
There was no defender within five yards of Charalampidis as the ball was knocked back across goal and the Carl Zeiss Jena striker could not miss with a simple header.
Wales must now pick themselves up for Wednesday's match away against Group D minnows San Marino, while Cyprus travel to take on the Republic of Ireland.
Cyprus: Georgallides, Okkarides, Satsias (Marangos 71),
Elia (Charalampidis 63), Michail (Yiasoumis 46), Paraskevas,
Garpozis, Makridis, Nicolau, Aloneftis, Okkas.
Subs Not Used: Morphis, Lambrou, Theofilou, Theodotou.
Booked: Marangos, Aloneftis.
Goals: Okkas 59, 68, Charalampidis 79.
Wales: Coyne, Ricketts (Easter 73), Collins (Morgan 44),
Gabbidon, Bale, Nyatanga, Ledley, Robinson, Davies, Bellamy,
Eastwood (Earnshaw 58).
Subs Not Used: Price, Eardley, Vaughan, Crofts.
Booked: Eastwood, Easter.
Goals: Collins 21.
Ref: Carlo Bertolini (Switzerland).