Luis Diaz started for Liverpool hours after his father was released following a kidnapping situation but his return could not stop his side going down 3-2 to Toulouse on Thursday.
The stunning upset came courtesy of goals from Aron Donnum, Thijs Dallinga and Frank Magri as Liverpool sank to their first defeat in the group stage of the Europa League this campaign but the game was not without controversy.
Toulouse now sit on seven points, two behind the Premier League club and three ahead of third-placed St Gilloise in Group E.
With 36 minutes gone, Donnum pounced on Kostas Tsimikas and robbed him of possession before slotting home via a deflection to give Toulouse the lead at the break.
At the start of the second half, the French side thought they had two only for the goal to be disallowed for a foul on Joel Matip.
But the hosts were now buoyant and soon did get a second when Dallinga took a touch in the box and drilled past Caoimhin Kelleher.
An own goal from Cristian Casseres on 73 minutes gave Liverpool a lifeline but the hosts, pushed on by a vibrant home crowd, punched back immediately.
Three minutes later, Kelleher could not hold a firmly hit cross and Magri was on hand to restore Toulouse's two-goal buffer.
Diogo Jota, on for Diaz, struck a second for Liverpool in the 89th minute.
The hosts were able to see the game out to claim a precious three points, but not before an equaliser seven minutes into injury-time by Jarell Quansah was ruled out after video review for an adjudged handball in the build-up.
Earlier on Thursday, Colombia's ELN guerrilla group freed Luis Manuel Diaz 12 days after the Liverpool star's father was kidnapped in his hometown of Barrancas.
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