Livingston lifted the first major trophy of their nine-year existence thanks to goals from Derek Lilley and Jamie McAllister in the CIS Cup final.
Jamie McAllister scored Livi's second goal at Hampden
Pre-match favourites Hibernian missed chances, with Marvin Andrews clearing off the line from Garry O'Connor.
And they were hit with two goals in two second-half minutes, Lilley driving the opener home from 12 yards then McAllister breaking clear to finish.
Tam McManus and Steve Dobbie came close for Hibs, but Livi held on for victory.
The West Lothian club, still in administration, become the first outwith the Old Firm to win a major honour since Hearts beat Rangers to lift the 1998 Scottish Cup.
Hibs boss Bobby Williamson's team selection had provided few surprises, although youngster Alan Reid got the nod ahead of both Steven Whittaker and McManus.
Livi were at full strength but were on the back-foot for much of the first half.
Goalkeeper Roddy McKenzie exemplified their nerves when he punched weakly clear only for Gary Caldwell's ambitious overhead kick to fly a few yards over the bar.
Hibs were pumping high balls behind the Livi back three and, when Scott Brown found Derek Riordan, McKenzie did well to hold the midfielder's dipping drive from 22 yards.
Brown was next to race clear, but his close control let him down inside the box and McKenzie raced off his line to block.
The loose ball fell perfectly for O'Connor, but his goal-bound shot was blocked on the line by Andrews.
Anything creative from Livingston was being provided by Lee Makel and his through ball gave David Fernandez the best chance of the opening 45 minutes.
Fernandez attempted to touch the ball past the advancing Daniel Andersson and into the empty net, but the goalkeeper's boot diverted it wide.
Hibs should have taken the lead after the break, when Thompson played a lovely cross to the front post, but the unmarked Brown somehow completely missed his header.
Derek Lilley opened the scoring for Livingston
Livi hit Hibs with a double blow.
Makel played a lovely ball out wide to Burton O'Brien, who hit the byline before playing it into the path of Lilley to sidefoot home from 12 yards.
Fernandez was next to expose Hibs' backline, finding McAllister breaking from his own half and the defender advanced on Andersson before curling the ball into the net.
Livi were now in command and Rubio almost turned a Fernandez cross into the net at the back post.
McNamee pounced on a poor crossfield ball from Gary Smith, drove into the Hibs box but poked the ball from 15 yards inches over the crossbar.
A McManus header straight at McKenzie and two thumping drives from fellow substitute Dobbie - one slipping just wide of the post - were the closest Hibs came to getting back into the match.
Hibernian: Andersson, Smith, Murdock, Doumbe, Edge, Scott Brown, Caldwell, Reid, Thomson, O'Connor, Riordan.
Subs: McManus, Whittaker, Dobbie, Nicol, Alistair Brown.
Livingston: McKenzie, Rubio, Andrews, Dorado, McNamee, Makel, Lovell, O'Brien, McAllister, Fernandez, Lilley.
Subs: Pasquinelli, McGovern, McLaughlin, Snowdon, Main.
Referee: W Young.