Wales (10) 34
Wales could not cope with Fiji's power and pace
Tries: Popham, S Williams, G Thomas, M Jones, M Williams
Cons: Hook, S Jones (2)
Pens: S Jones
Fiji (25) 38
Tries: Qera, Delasau, Leawere, Dewes
Cons: Little (3)
Pens: Little (4)
A late try from Graham Dewes saw Fiji dump Wales out of the World Cup and get a quarter-final against South Africa.
Wales' open style played into Fiji's hands, big hits and strong running leading to tries from Akapusi Qera, Vilimoni Delasau and Kele Leawere.
Alix Popham, Shane Williams, Gareth Thomas and Mark Jones brought Wales back, and Martyn Williams' 73rd-minute interception try looked the clincher.
But the islanders rallied, Dewes bullying over from short range.
It was Fiji's first win in nine games against Wales and sees them advance to their first quarter-final since 1987.
With a record of six wins from 20 games in charge of Wales, coach Gareth Jenkins' position will now come under serious question.
His side had aimed to banish their slow-starting blues at the Stade de la Beaujoire in Nantes, and in the first minute a superb Stephen Jones break deep in his own half should have led to a try.
Jones found the supporting Tom Shanklin, but he delayed his pass to a free Mark Jones, allowing the defence to rally.
Stephen Jones put Wales ahead with a penalty and Chris Horsman and Gethin Jenkins had Fiji under pressure at the scrum, but Jones missed with a straightforward kick and Wales continued to spurn overlaps.
Seru Rabeni had already made his mark on Shanklin and Thomas with trademark hits, and another on James Hook in midfield forced a turnover.
The islanders attacked quickly with a flowing move, the ball coming to Gloucester flanker Qera who stormed over from close range.
With confidence flying, Nicky Little and Rabeni attacked from their own 22.
The ball fell to Delasau, who chipped over the top of the defence, a wicked bounce flying over Mark Jones' head and collected his own kick for the second try.
Little added two penalties, before a dynamic Qera break from his own 22 ended with Kele Leawere barging over for the third try from close range.
A panicked Wales spurned penalties in front of goal, and were finally rewarded in the 34th minute as a five-metre scrum was walked over for Popham's try.
Fiji relished Wales' desperate, expansive style, but their discipline fractured with a late hit from Leawere on Popham.
Qera was then yellow-carded for aiming a knee into Stephen Jones' chest on the stroke of half-time, but Hook missed the resultant penalty from in front of the posts.
Wales pounced on 14-man Fiji after the break, and after a Martyn Williams turnover in his own 22 Shane Williams danced inside from the wing with a superbly balanced run, beating three defenders and crossing under the posts.
A fine three-quarter move from an attacking scrum saw Hook free Mark Jones with an inside pass.
The wing found Gareth Thomas, who celebrated becoming the first Welshman to 100 caps by taking his record try tally to 40.
Williams thought he had sealed the win for Wales
Dwayne Peel found acres of space from a line-out to spark the next try, accurate passing along the line sending Mark Jones in at the corner and regaining the lead for Wales, Stephen Jones' conversion making it 29-25.
The outsiders found their second wind with some thrilling attacking rugby, two Little penalties putting them back in front going into the final quarter.
Wales wheeled on the replacements, but needed a desperate, brave tackle from Thomas on his own line to deny Seremaia Bai a try.
As Fiji went for the kill, Little floated out a needless pass - and Martyn Williams plucked the ball out of the air for a 65m run-in.
But the islanders regrouped once more and, when Delasau was held out inches short, Dewes picked up to cross for a try awarded by the video referee, sealing the biggest upset of the 2007 World Cup.
It was Wales' third south sea island embarrassment in World Cups following defeats to the Samoans in 1991 and 1999.
Wales: G. Thomas, M. Jones, Shanklin, Hook, S. Williams, S. Jones, Peel, Jenkins, Rees, Horsman, A. Jones, Evans, Charvis, M. Williams, Popham.
Replacements: Phillips for Peel (57), R. Thomas for Rees (47), D. Jones for Horsman (66), Gough for Evans (66), Owen for Popham (66). Not Used: Robinson, D. James.
Fiji: Ratuvou, Delasau, Rabeni, Bai, Neivua, Little, Rauluni, Dewes, Koto, Railomo, Leawere, Rawaqa, Naevo, Qera, Koyamaibole.
Replacements: Ligairi for Rabeni (67), Bobo for Neivua (52), Daunivucu for Little (80), Sauturaga for Koto (78), Qiodravu for Railomo (54), Ratuva for Qera (74). Not Used: Lewaravu.
Sin Bin: Qera (40).
Referee: Stuart Dickinson (Australia)