Late goals from Maximilian Hofmann and Yusuf Demir denied Dundalk their first Europa League point of the campaign as Rapid Vienna secured a 4-3 home win.
An 82nd-minute penalty from substitute David McMillan had looked to have earned a hard-fought 2-2 draw for the League of Ireland side.
Hofmann and Demir then struck before McMillan added another penalty.
Patrick Hoban gave Dundalk a seventh-minute lead, with Dejan Ljubicic and Kelvin Arase putting the hosts 2-1 up.
It was a third defeat from three Group B games for Filippo Giovagnoli’s men after they lost at home to Molde and away to Arsenal.
A goalkeeping error led to Dundalk taking the lead in the seventh minute after good build-up play down their right hand side through Sean Hoare and Sean Gannon.
The ball was played back to captain Chris Shields and his searching cross found Hoban, whose header squeezed past goalkeeper Paul Gatler, who looked set to make a save.
The home side’s equaliser on 22 minutes also came courtesy of poor goalkeeping, with skipper Dejan Ljubicic making the most of not being closed down to blast a long-range shot on target. It was hit with power but was very close to visiting keeper Aaron McCarey who let it sneak in off the crossbar.
Vienna began to seize control of the match though looked vulnerable at the back, and Dundalk came close again through Michael Duffy before McCarey produced great reactions and strong hands to keep out a back-post volley from Christoph Knasmullner.
McCarey, deputising for regular goalkeeper Gary Rogers, made another fine save from Thorsten Schick on 79 minutes, but the ball fell to Arase who found the open net with a diving header to give Vienna the lead.
McMillan was fouled in the box by fellow substitute Mario Sonnleitner and scored from the resulting spot-kick to make it 2-2 as the visitors pressed for what would have been their first point in the group.
However, they were let down again by McCarey as he came off his line for a cross and failed to collect the ball, allowing Hoffman to head home on 87 minutes.
Demir found the bottom corner with an accurate low drive before McMillan struck his second penalty with the final kick of the match.
- 22StojkovicBooked at 27mins
- 20HofmannBooked at 18mins
- 4BaracSubstituted forSonnleitnerat 54′minutesBooked at 81mins
- 16PetrovicSubstituted forGrahovacat 72′minutes
- 13SchickBooked at 89mins
- 28KnasmüllnerSubstituted forDemirat 72′minutes
- 4HoareBooked at 27mins
- 21ClearyBooked at 45mins
- 15LeahySubstituted forDummiganat 65′minutesBooked at 82mins
- 2GannonSubstituted forMountneyat 65′minutes
- 6FloresSubstituted forMurrayat 76′minutes
- 7DuffySubstituted forOduwaat 72′minutes
- 9HobanSubstituted forMcMillanat 76′minutes
- Trustin Farrugia Cann
Match ends, SK Rapid Wien 4, Dundalk 3.
Second Half ends, SK Rapid Wien 4, Dundalk 3.
Goal! SK Rapid Wien 4, Dundalk 3. David McMillan (Dundalk) converts the penalty with a right footed shot to the bottom left corner.
Penalty conceded by Filip Stojkovic (SK Rapid Wien) after a foul in the penalty area.
Penalty Dundalk. Kelede Nathan Oduwa draws a foul in the penalty area.
Attempt missed. Ercan Kara (SK Rapid Wien) right footed shot from outside the box misses to the left. Assisted by Kelvin Arase.
Yusuf Demir (SK Rapid Wien) wins a free kick in the attacking half.
Foul by Gregory Sloggett (Dundalk).
Goal! SK Rapid Wien 4, Dundalk 2. Yusuf Demir (SK Rapid Wien) left footed shot from the left side of the box to the bottom right corner. Assisted by Kelvin Arase.
Thorsten Schick (SK Rapid Wien) is shown the yellow card.
Foul by Filip Stojkovic (SK Rapid Wien).
Kelede Nathan Oduwa (Dundalk) wins a free kick on the left wing.
Goal! SK Rapid Wien 3, Dundalk 2. Maximilian Hofmann (SK Rapid Wien) header from the centre of the box to the centre of the goal. Assisted by Filip Stojkovic with a cross following a corner.
Corner, SK Rapid Wien. Conceded by Sean Michael Murray.
Attempt missed. Gregory Sloggett (Dundalk) header from very close range is close, but misses to the right. Assisted by Sean Michael Murray with a cross following a corner.
Corner, Dundalk. Conceded by Srdjan Grahovac.
Foul by Yusuf Demir (SK Rapid Wien).
John Mountney (Dundalk) wins a free kick in the defensive half.
Foul by Kelvin Arase (SK Rapid Wien).
Sean Hoare (Dundalk) wins a free kick in the defensive half.