Wolfsburg stunned Real Madrid with two goals in eight first-half minutes to take control of their Champions League quarter-final tie.
The 10-time winners of the competition face an uphill task just to progress to the last four this year after losing 2-0 in Germany in the first leg.
Real goalkeeper Keylor Navas had not conceded in this competition prior to this game but he was beaten by Ricardo Rodriguez's penalty, before Maximilian Arnold doubled the advantage soon after.
Four days on from a win at the Nou Camp with 10 men, Zinedine Zidane's side looked shaky at the back and have it all to do in the return fixture in the Spanish capital next Tuesday.
There were early hints that this would not be a straightforward night for Real when, 70 seconds in, Cristiano Ronaldo was flagged for a marginal offside call when he collected Karim Benzema's pass and turned home.
Moments later Gareth Bale was then denied what appeared a clear penalty after Luiz Gustavo clattered into his leg inside the area.
Madrid should have led anyway through Benzema who, having returned to the pitch following treatment, moved beyond Dante before placing his effort into Diego Benaglio's leg.
Wolfsburg were a threat on the counter, though, and after Bruno Henrique had headed at Navas, the Real keeper finally conceded after 738 minutes without doing so in the Champions League when Rodriguez sent him the wrong way from 12 yards out.
The spot-kick call was debatable as Andre Schurrle appeared to kick his own foot as he swung his leg past Casemiro, who was caught on the wrong side of the ex-Chelsea forward.
Seven minutes later it was 2-0, Julian Draxler finding Henrique in space and from his cross Arnold stole a march on Sergio Ramos and finished first-time past Navas.
Benzema then headed wide before injury eventually forced him off, Toni Kroos drew Benaglio into a save and Bale planted a 25-yard free-kick over his crossbar of the stroke of half-time.
Zidane's side pushed for an away goal after the interval and Ronaldo missed the target with two attempts from Bale crosses.
However, they almost found themselves three goals down as Schurrle took up the space once again left vacant by Marcelo, but, after taking a touch, he fired over.
Marcelo's frustration was evident when he kicked out at Arnold before comically falling to the ground after placing his head in the goalscorer's chest, with only the victim and Bale booked in the subsequent skirmish.
Ronaldo was thwarted again by Benaglio after substitute Isco had threaded a pass through with the outside of his boot, while Navas pushed away from Max Kruse at the other end to ensure the task facing Real in the second leg did not become even more difficult.