Leaders Real Madrid and rivals Barcelona suffered their first Primera Liga defeats this season on Saturday at Espanyol and Villarreal respectively.
Real were no match for team-of-the-moment Espanyol as they lost 2-1. Albert Riera and Raul Tamudo, who led Spain to a 3-1 victory against Denmark in their Euro 2008 qualifier last weekend, scored the goals at the beginning of each half.
Sergio Ramos pulled one back for Real at the end.
The champions stay top with 19 points while Espanyol, who have won four games on the trot, secured fifth place on 16.
Villarreal were impressive as they tore apart visitors Barcelona 3-1, with two penalties from Marcos Senna, to climb to second place with 18 points.
Valencia cruised to a 4-2 win at Deportivo Coruna with two headers from striker Fernando Morientes and are in third place, also on 18 points. Barca slipped to fourth with 17.
Sevilla returned to winning ways after four consecutive league defeats with a comfortable 2-0 win at bottom club Levante, to go 10th with nine points.
Br azilian striker Luis Fabiano scored both goals in the first 14 minutes to spoil Italian coach Giovanni De Biasi's debut on the bench for the home side.
Winger Riera scored on his debut for Spain in Denmark last weekend and continued his run of form by heading Espanyol in front from a corner after just two minutes against Barca.
Ernesto Valverde's side continued to look sharper, breaking forward at pace, and Tamudo doubled the lead with a stunning goal early in the second half.
Receiving a pass from Valdo, the 30-year-old saw Iker Casillas off his line and floated a delicate chip over his international team mate from the edge of the area.
Ramos scored from a corner at the end to evoke memories of Real's fightback from 3-1 down to win 4-3 against Espanyol last May, but it was the home side who had looked more likely to add to their lead up to that point.
Earlier, Barcelona had barely touched the ball when Villarreal took the lead in the Madrigal with a well-worked move down the left in the third minute.
Santi Cazorla passed to Guillermo Franco on the edge of the area and carried on to pick up the Mexican's deft backheel before sweeping a curling shot past Victor Valdes.
The home side continued to pile forward and won a penalty, when Eric Abidal brought down Robert Pires, converted by Senna in the 13th minute.
Barca came back when Lionel Messi's pass allowed Bojan, starting in place of Ronaldinho who was rested, to get behind his marker and fire in off the near post in the 25th.
While there were some doubts about the first penalty, the second was clear when Gabriel Milito took Pires's legs as he raced into the area and the Argentine was lucky to remain on the pitch. Senna put away his second spot kick in the 34th.
Coach Frank Rijkaard went for all-out attack after the break bringing on forward Giovani dos Santos for defender Oleguer but it was Villarreal who continued to pose the greater threat.
Barcelona lost Deco to a thigh injury near the end and the Portugal midfielder faces up to five weeks on the sidelines.