Fernando Gonzalez caused a huge upset at the Masters Cup by defeating world number one Roger Federer 3-6 7-6 (7-1) 7-5 in his opening round-robin match.
Gonzalez had lost all 10 of his previous matches against Federer but he found some blistering form in the second-set tiebreak to level the match.
Federer had five break points in the decider but Gonzalez hit back with some outrageous winners to claim victory.
It is the first time Federer has lost twice in a row since 2003.
"I thought it was ridiculous some of the shots he was coming up with," said a shell-shocked Federer.
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"I can't do much when he drills that incredible forehand in the corner. I wish I had an excuse but I just lost the tiebreak in a bad way and never got the edge in the third set."
It is also the first time Federer has lost a round-robin match at the season-ending championships and he is now likely to have to beat both Andy Roddick and Nikolay Davydenko if he is to progress from the Red Group.
Roddick earlier survived a scare against Davydenko before triumphing 6-3 4-6 6-2.
Gonzalez, who lost to Federer in the Australian Open final in January, was relieved to end his losing run against the world number one.
"It feels good. After 10 times, it's my turn now," he said.
"I think the key was my serve and not being scared to go for my shots. I played three unbelievable points to break him at 5-5 in the third set.
"I think my best match ever was in the Australian Open semi-finals against Tommy Haas, but today I played really good."
Federer, who was beaten twice by David Nalbandian in October, was in cruise control heading into the second-set tiebreak.
"I've always been pretty expressive and emotional on the court"
But Gonzalez quickly established a 6-0 lead in the tiebreak - helped by a brilliant reaction lob from a Federer smash - and clinched it 7-1.
Federer lost his cool, berating the umpire at the change of ends for being too slow to see that the world number one had challenged a call.
His mood hardly improved in the third set as Gonzalez stunned him with some incredible winners - particularly off the forehand side.
The Chilean double-faulted on his first match point but clinched one of the best wins of his career when Federer went wide with a forehand.
Roddick has been struggling with niggling injuries lately and was rumoured to be considering pulling out of the Shanghai showpiece in order to be fit for the Davis Cup final.
However, there was no sign of any physical problems against Davydenko, who himself has been complaining of an elbow injury.
The American led by a break in the second set before Davydenko hit a purple patch to snatch it.
Roddick smashed his racquet in anger but recovered his poise to cruise through the decider.
"As far as smashing racquets, for as many times as it's helped me, it's hurt me that many times also," Roddick said.
"But it's just part of my personality. I've always been pretty expressive and emotional on the court. Sometimes it helps, sometimes not so much."
ATP Masters Cup, Shanghai, 11-18 November:
Red Group:
Roger Federer (Swi)
Andy Roddick (US)
Nikolay Davydenko (Rus)
Fernando Gonzalez (Chi)
Gold Group:
Rafael Nadal (Spa)
Novak Djokovic (Ser)
David Ferrer (Spa)
Richard Gasquet (Fra)
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