Goals from Burnley forwards Chris Wood and Ashley Barnes at Turf Moor left Spurs' hopes of piling the pressure on the top two, Manchester City and Liverpool, in tatters and Tottenham's normally serene boss Mauricio Pochettino raging.
But Crystal Palace's Roy Hodgson was left beaming as he became the oldest man to take charge of a Premier League match at the age of 71 years, 198 days - and marked the occasion with a 4-1 win at Leicester City.
Spurs' shock defeat kept them on 60 points, still five adrift of leaders City and Liverpool, who have the chance to move three points clear at the top when they visit Manchester United on Sunday.
At the other end of the table, Aaron Mooy's Huddersfield Town's freefall towards the second-tier Championship hurtled on when the league's bottom club lost 2-0 at Newcastle United.
Pochettino had seen victory over Burnley as imperative to his side's hopes of maintaining a title challenge.
Yet the usually affable Argentine ended up cutting an angry, frustrated figure at the whistle, confronting referee Mike Dean over what he clearly felt had been an incorrect decision that led to Burnley's first goal after 57 minutes.
Spurs had been claiming a goalkick after Jeff Hendrick appeared to touch the ball last before it went out of play but, instead, a corner was awarded to Burnley which resulted in Wood heading home Dwight McNeil's delivery.
England captain Kane, back after six weeks out with an ankle injury, responded with goal after latching on to a quick Danny Rose throw-in before Barnes notched an 83rd-minute winner, prompting Pochettino to become embroiled in a face-to- face confrontation with Dean.
"You know how important was the game and when you feel so disappointed and upset, you make some mistakes," he said.
"We made some mistakes on the pitch and I made some mistakes afterwards on the pitch. I need to go to the dressing room and drink some water but what happened, happened."
He seemed resigned that Spurs' title hopes were now over.
"If we didn't win, we cannot put pressure and we cannot think now of being a real contender. It is a massive opportunity lost for us," he said.
While Pochettino lost his composure, Hodgson was all smiles after his Palace side won at Leicester with a double from Wilfried Zaha, Michy Batshuayi's first goal for the club and a Luka Milivojevic penalty.
Meanwhile, things look grim for Huddersfield after skipper Tommy Smith was sent off for a lunging 20th-minute challenge allowing Newcastle to ease to victory with second-half goals from Salomon Rondon and Ayoze Perez.
Newcastle, with a third straight home win under Rafa Benitez, moved up to 15th, two points behind 14th-placed Burnley and Palace, 13th.
In a remarkable match in the south coast featuring three penalties, Joshua King scored one and missed another for Bournemouth while Wolverhampton Wanderers earned a 1-1 draw with Raul Jimenez's 83rd-minute spot-kick.