England made a disappointing return to competitive action following their World Cup heroics as they were beaten by Luis Enrique's Spain in their inaugural UEFA Nations League game.
Saul Niguez and Rodrigo were on the scoresheet to ensure the visitors came from a goal behind following Marcus Rashford's early opener.
Danny Welbeck thought he had salvaged a point for the hosts when he found the net in stoppage time. However, his leveller was ruled out following a controversial foul on goalkeeper David de Gea.
The Three Lions night was further soured by the injury to returning full-back, Luke Shaw. The Manchester United defender was stretchered off following a lengthy stoppage while he was treated for a head injury.
Two counter-attacking goals of the highest order
This Nations League fixture was kicked off with a wave of loud boos for Spain and Real Madrid captain Sergio Ramos with the four-time Champions League winner shrugging off the jeers in expert fashion.
Their World Cup winning skipper was involved in the first real chance of the night when Ramos hit a brilliant long ball forward towards Thiago Alcantara who looked to expose England in behind, Southgate's side looked cut open but the linesman was at hand to flag for offside.
Despite a wave of La Roja possession, The Three Lions broke the deadlock after only 11 minutes with a swift counter-attacking goal of the highest order.
Jordan Henderson cleverly broke up play in the middle of the park before finding England captain Harry Kane who saw the bursting run of the returning Shaw who drove at goal before picking a perfect pass to his Manchester United teammate Rashford.
The English youngster made no mistake with the finish as his deft touch left his fellow club teammate De Gea with no chance as suddenly England found their World Cup mojo to lead against Enrique's side.
Following a goal of the highest order, the visitors quickly responded to peg the hosts back after another quick counter-attack that left England helpless and exposed.
Another lovely move ended with the ball in the back of the net; however, sadly for the hosts, it meant their lead against the former world and European champions only lasted a matter of minutes.
This time Thiago broke free of the England backline and pulled the ball back for Atletico Madrid's Saul who burst into the box before sweeping a well-hit low finish past Jordan Pickford from eight yards out.
The England goalkeeper may have got a hand on it, but the strike had too much power and the visitors were quickly back level.
Sloppy set-piece ensures Spain salvage comeback
Wembley responded well to being set-back so quickly to their beloved England's quick opener, and despite further waves of Spain possession Southgate's side looked more than comfortable with the threat of former Barcelona managers impressive Spain side.
However, the game did see the third goal before half-time and following two goals of the highest quality early on, the third on the night was certainly one England will be severely scrutinised for.
Spain were awarded a free-kick down the left-hand-side which was drilled in low towards the front post by Thiago.
Ex-Bolton Wanderers man Rodrigo ran across the England backline completely unmarked and unchallenged before the Valencia striker snuck in his finish past a helpless Pickford.
A set-piece that completely opened up Southgate's side and was a rare example of poor defending that gifted the visitors a half-time lead despite the opening 45 minute period being fairly positive from the hosts.
La Roja hold out for three points despite a controversial disallowed goal
The turning point of the match occurred in the early moments of the second half when full-back Shaw went down following a clash of heads.
His club manager Jose Mourinho was in attendance watching as six physios/medical staff were treating his United player before the full-back was withdrawn from the match on a stretcher.
The departure of Shaw seemed to slow down any real intent from both sides as the visitors looked to take total control with their usual possession-based football.
Enqiue's side could have added a third when full-debutant Marcos Alonso's cross eluded the entire England back-line to find Thiago and the Bayern Munich man's well-hit volley with the outside-of-the-boot stunningly struck the roof of the net to come desperately close for the visitors.
A huge chance for the hosts went begging when the first link up of the game between Kane and Rashford allowed England's No.10 one-on-one with De Gea.
The forward running Red Devil sprinted past Nacho before striking his effort straight at goal that was palmed away by the Spanish goalkeeper to squander a huge opportunity for The Three Lions.
Southgate's team looked to have salvaged an equaliser right at the death when the ball finally found the back of the net.
A Joe Gomez cross was cleared erratically by Ramos sending the ball flying in the air before De Gea came to catch and looked to clear the danger.
The Manchester United goalkeeper rose up high to catch before tangling with a still Danny Welbeck who stood his ground before De Gea spilt the effort for the Arsenal striker to tap home into the net.
However, referee Danny Makkelie controversially ruled it out for a foul to deny England a deserved equaliser as the Spanish visitors saw the game out for a famous Wembley win.
The win ensures La Rojo lead Group D of Pot One with the opening win as Enrique's side move on to Tuesday's Nations League encounter with World Cup runner-up Croatia.
England will have to dust themselves off following their first competitive Wembley defeat since 2007. The Three Lions will also move on to Tuesday where they face-off against Switzerland in an international friendly at the King Power Stadium.