Derry City's nine-match unbeaten run and 100% record at the Brandywell this season was ended in comprehensive fashion by Sligo Rovers.
Sligo missed a series of early chances before Raffaele Cretaro celebrated his 450th game for the club by heading them into the lead on 27 minutes.
Derry improved after the break as Barry McNamee and Ronan Curtis went close.
However, after John Russell hit the Derry woodwork Jimmy Keohane made the game safe with a 69th-minute goal.
With leaders Dundalk winning 2-0 at Bohemians, Derry are now five points off the pace and the Candystripes drop to third after Cork City edged a 1-0 home win over St Patrick's Athletic.
Derry could have few complaints about Friday's result.
The Candystripes went into the game as favourites after comfortably beating Sligo in the EA Sports Cup 10 days ago, but Dave Robertson's side were a completely different proposition in this contest.
Cretaro tormented the Derry defence - in particularl young central defender Patrick McClean - from the off and the Candystripes had plenty of warnings before the veteran did put the visitors ahead.
Liam Martin squandered an early Sligo chance as he fired straight at Gerard Doherty from close range before Mick Leahy headed wide.
Doherty denied Cretaro in the 24th minute but the striker made no mistake three minutes later as he nodded a Craig Roddan free-kick to the net.
Derry did improve in the third quarter but failed to make a couple of openings count as McNamee dragged a chance wide and Curtis then fired wide from a tight angle.
However, the clearer cut chances were still being created by Sligo as Martin hit the woodwork on 65 before Keohane's first goal for Sligo sealed the away win on 69.
Sligo's second win of the campaign moves them up to eighth in the table.