Omar El Kaddouri struck in stoppage time to snatch victory for Belgium and condemn England Under-21s to their first Euro 2013 qualifying defeat.
After four wins from their first four qualifiers, Stuart Pearce's side were pre-match favourites - and Martin Kelly headed them into a deserved early lead.
But despite dominating England could not add to their lead and Jens Naessens equalised from El Kaddouri's cross.
And El Kaddouri then sealed a barely deserved win with a late low strike.
"We got our noses in front with a decent goal and should have gone on from there and made it two or three-nil," said Pearce. "We didn't, we were waiting for things to happen rather than making them happen ourselves and that's international football.
"We'll take it on the chin and move on."
It was not a result that reflected the balance of play.
The visitors stroked the ball around well and were always a danger from set pieces, one of which led to their early goal as Kelly rose unmarked to head in off the post from Jordan Henderson's free-kick.
Marvin Sordell then saw his snap-shot superbly saved by home keeper Koen Casteels before Henderson forced an equally good stop late on.
By that stage, however, Belgium were already level after Naessens prodded home from El Kaddouri's centre.
And the substitute completed a remarkable turnaround with the late winner, firing home after a shot had come back off the post.
England remain top of their group with 12 points from five games, four points clear of Belgium in second - and Pearce urged his side to bounce back in the reverse fixture between the teams in February.
"We play Belgium again in February and have to reverse the result against them," he said.
"All you can do is move on. We're on 12 points from five games now and have to make sure we win at least probably two more matches to get out of this group."
Belgium U21: Casteels, Ngawa, Wuytens, Mertens, De Jonghe, Musonda, Francois (El Kaddouri 60), De Pauw, Bruno (Naessens 60), Meunier (Angeli 68), Badibanga.
Subs Not Used: Coosemans, De Greef, Daeseleire, Cuvelier.
Booked: De Jonghe, El Kaddouri.
Goals: Naessens 72, El Kaddouri 90.
England U21: Butland, Smith, Clyne, Lowe (Barkley 90), Kelly, Dawson, Oxlade-Chamberlain, Henderson, Sordell (Keane 77), McEachran, Ameobi (Gardner 62).
Subs Not Used: Steele, Flanagan, Dunk, Butterfield.
Goals: Kelly 14.
Ref: Harald Lechner (Austria).