Second-seeded Michigan State was shocked by No. 15 seed Middle Tennessee State 90-81.
The Spartans played from behind all day and trailed 41-35 at halftime to the No. 15 seed Conference USA champion at Scottrade Center in St. Louis Missouri.
Reggie Upshaw scored 21 points to lead the balanced Blue Raiders (25-9), who shut down player of the year candidate Denzel Valentine. Middle Tennessee never trailed the Spartans (29-6) in one of the biggest upsets since the tournament began seeding teams in 1985.
It is the eighth time in history that a 15-seed has upset the No. 2 seed, and first since Florida Gulf Coast beat Georgetown in 2013. The Eagles went on to reach the Sweet 16.
"We just got beat," Coach Tom Izzo said. "But I want everybody to know this team had a chance to win a national championship. I don't feel one bit different.
"I'll be honest with you, in my wildest dreams I didn't think they'd hit some of the shots they hit. We didn't guard them good, but man, they made some shots."
The Spartans' Matt Costello matched a career-best with 22 points, but it wasn't enough to offset Valentine's miserable afternoon. The senior had 13 points and 12 assists, but he also had six turnovers - one of them coming with the Spartans trailing 79-76 and less than three minutes to go.
Michigan State twice had chances to tie the game after that, but Valentine missed an open 3 from the top of the key, and Bryn Forbes missed another. The Blue Raiders eventually scored on back-to-back runouts to establish some breathing room, then coaxed the final few seconds off the clock.
Darnell Harris and Perrin Buford scored 15 apiece, and Jaqawn Raymond had 11, as the Conference USA champion Blue Raiders won their first NCAA Tournament game since 1989.
"I'm more mad and disappointed because I know what this team could accomplish," Valentine said. "It kind of fell apart, and it just stinks right now because I know the capability our team had."
Valentine's frustration reached its apex after he committed back-to-back turnovers in the second half. During a stoppage in play and with the Blue Raiders leading 51-43, Valentine stalked back to his team's huddle and proceeded to slam his hand into the floor.
Michigan State slowly trimmed the lead to 65-64 on a basket by Costello with eight minutes to play, but the Blue Raiders scored on their next six trips down floor to hold their lead.
They held onto it the rest of the way, too. It was the first time the Spartans, heavily favored to reach the Final Four, were bounced from the tournament in the first round since 2011.
"There's such great college stories this time of year, every year," Blue Raiders coach Kermit Davis said. "We looked at it and said, 'Guys, why not Middle Tennessee?' It's going to be something after this weekend. Everybody is going to have a great, great moment - a great weekend."
Michigan State, which has never lost a opening game as a No.2 seed, entered the game a 17-point favorite and struggled all day.
Middle Tennessee State advances to play Syracuse in the second round Sunday.
It was the final game for Valentine, Costello, Forbes and backup forward Colby Wollenman, and Izzo got emotional talking about the impact they had on his program. "They've done it all," he said. "Other teams are going to hear ... what this team did. That's probably the best compliment you can give them."
Middle Tennessee State: The Blue Raiders have won seven straight. ... Potts, who led the nation in 3-point field-goal percentage, was 3 for 5 from beyond the arc. ... Upshaw was 8 of 14 from the field.
Michigan State: Forbes finished with 14 points. Harris had nine points and five turnovers. ... The Spartans reached the national title game the last time they were No. 2 seeds, winning the championship in 1979 and finishing second in 2009. ... The Spartans had won 13 of their last 14.