The Rebels held off a second half fightback to beat the Chiefs 16-15 in Melbourne and record their first ever victory over the twice Super Rugby champions.
Despite the loss the Chiefs remain second in the overall standings behind the Hurricanes.
Number eight Scott Higginbotham and halfback Nic Stirzaker scored tries to give the Rebels a 16-3 lead at half-time in Melbourne and they held on despite midfielder Charlie Ngatai and loose forward Michael Leitch crossing in the second half for the Chiefs.
The visitors were left ruing two yellow cards, the first to winger James Lowe in the first half causing a try to be called back and the second denying them captain Liam Messam for the last six minutes of the match.
"We never give in but it's a very disappointing result, we wanted to win," Messam said.
"They were outstanding tonight and our discipline let us down."
The Chiefs might not have needed to chase the match had replacement first-five Damian McKenzie managed to add the extras after Leitch's 68th minute try, but his conversion attempt came back off the upright.
The Chiefs needed a win to keep pace at the top of the Super Rugby standings with the Hurricanes, who beat the Crusaders earlier last night and now have a five-point lead at the top of the overall standings.
With a fifth win of the season, Melbourne's equalled their previous best tally in a season and they remain in the hunt for a maiden appearance in the playoffs.
"Absolutely rapt," said Rebels skipper Higginbotham.
"The boys did fantastically well."
This morning the Cheetahs beat the Stormers 25-17 in Bloemfontein before the Bulls edged the Lions 35-33 in Pretoria to climb to the top of the South African conference.