Brazil meanwhile - missing their talismanic presence with captain Neymar serving a suspension - were undone by goals from Chile stars Eduardo Vargas and Alexis Sanchez in Santiago.
Vargas, topscorer in Chile's triumphant Copa America campaign, picked up where he left off in that tournament to fire the hosts into the lead on 72 minutes.
Arsenal star Sanchez then applied the coup de grace in the 90th minute, jabbing home from close range after a wonderful flowing move which ripped Brazil's defence apart.
Chile manager Jorge Sampaoli hailed his side's victory, the first by Chile over Brazil since 2000.
"I'm very happy because I have never beaten Brazil, and to beat a team that has caused us so many problems in the past means a lot," Sampaoli said.
"Brazil are a great team, with great players who will surely be in the next World Cup," added Sampaoli.
Brazil had been desperate to move on from a disappointing Copa America campaign which followed their humiliating 7-1 drubbing against Germany in last year's World Cup semi-finals.
But the Brazilians, lacking the creative flair of Neymar, struggled to find a way through a physical Chile side who were fortunate to finish the game with 11 men.
Yet while Brazil were left reeling, there were no such problems for Uruguay, who shrugged off the absence of star strikers Luis Suarez and Edinson Cavani to score a historic first ever away win over Bolivia in La Paz.
The high altitude of La Paz has often left visiting sides gasping for breath, with Uruguay suffering a 4-1 thrashing in their last trip to the Bolivian capital in 2012.
However goals in each half from Martin Caceres and Diego Godin clinched a clinical 2-0 victory for the Uruguayans, who had never won in La Paz in five previous attempts.
Colombia meanwhile opened their qualifying campaign with a 2-0 win, Teofilo Gutierrez and Edwin Cardona getting the goals in a hard-fought victory over Peru in Barranquilla.
In the day's other game, Paraguay snatched a late away win over Venezuela when Derlis Gonzalez pounced on a defensive mistake to score the game's only goal in the 85th minute.