Berlin: Augsburg extended Bayern's winless streak to four games as Mergim Berisha scored the only goal of the match while Borussia Dortmund captured the top spot after substitute Youssoufa Moukoko provided the 1-0 winner against stubborn Schalke at the seventh round on Saturday.
Bayern controlled possession from the starting whistle and forced Augsburg onto the back foot in the opening stages as Sadio Mane and Leroy Sane tested goalkeeper Rafal Gikiewicz in quick succession.
Augsburg defended well and almost finished off a counterattack, but Bayern custodian Manuel Neuer was equal to Florian Niederlechner's hammer from 20 metres in the 24th minute, reports Xinhua. The German giants started an onslaught on Augsburg's goal but neither Jamal Musiala nor Leon Goretzka was able to break the deadlock before the half time.
The "Fuggerstadter" eventually flabbergasted Bayern with the opener at the hour mark when Berisha tapped home a loose ball from 11 meters following a free kick.
Bayern pressed frenetically for the draw but Thomas Muller and Sane couldn't beat Gikiewicz from promising positions.
Augsburg's goalkeeper remained in the thick of things as he defused a dangerous header from Neuer in the dying seconds of the game.
The hosts' defence stood firm and ensured Bayern Munich's first defeat of the season.
"When I look at the statistics, we should have won the game. After the deficit it was very difficult for us. I think about everything about me, about the situation, about everything," said Bayern head coach Julian Nagelsmann.
"After four games without a win, we are stunned and devastated. If you can't turn your chances into a tangible reward, you stand there with zero points. That Manuel Neuer produced the best chance of the game says it all," said Bayern midfielder Thomas Muller.
Elsewhere, Borussia Dortmund recaptured the top spot as the "BVB" overpowered newly promoted Schalke by courtesy of youngster Moukoko, who headed home the winner in the 79th minute.
Eintracht Frankfurt snatched its third win of the season after goals from Sebastian Rode, Daichi Kamada and Kristijan Jakic smoothed the way for the 3-1 win over Stuttgart.
Milos Veljkovic's late 1-1 equalizer helped newcomers Werder Bremen to share the spoils with Bayer Leverkusen and Jonas Hofmann's first-half brace secured Borussia Monchengladbach a 3-0 victory over Leipzig.