City trailed, fought back to lead at the break before Nigel Clough's men hit back with two second-half strikes to win the game 3-2.
The Blues have Derby County and Grimsby Town still to face in the group stage of the competition, and on this display, will be still hopeful of progressing.
On a pleasant sunny evening in north east Derbyshire, City’s Papa Johns trophy quest began against League Two side Mansfield Town.
And the chances for both teams came thick and fast in an entertaining, open Papa Johns Trophy clash at the One Call Stadium.
In-between, the Stags had their own chances with Jordan Bowery, Stephen McLaughlin and James Gale all going close before the deadlock was finally broken when Luke Akins nodded home on 16 minutes.
City continued the cultured passing game and were behind for just 13 minutes – with the first of a brace of quickfire goals levelling the scores.
Carlos Borges raced clear to round keeper Scott Flinders and coolly stroke the ball into the empty net to make it 1-1.
Then, three minutes later, Mebude collected on the right before sending a precise low ball across for Will Dickson to side-foot home from a couple of yards out – a lead that Brian Barry-Murphy’s side held to half-time.
Mansfield began the second-half brightly and took just five minutes to level the scores through James Gale as this thrilling encounter swung one way then the other.
There were half-chances for both sides in the time that remained, but the best of them fell to Mansfield - with Kieran Wallace guilty of gift-wrapped opportunity from eight yards that almost cleared the stand behind Mikki van Sas' goal.
But the Stags had the final say on the night to end the Blues' unbeaten start as George Lapslie grabbed what proved to be the winner on 84 minutes.
City had almost levelled in added time as Borges was denied by the keeper as he was sent clear - and 60 seconds later the same player saw his 20-yard effort strike the underside of the bar.
What it means...
It's early days in the Papa Johns Trophy group stage, with games against Derby County and Grimsby Town still to come for the EDS.
CITY: Van Sas, Larios, Burns, Katongo, Taylor (Galvez 60), Charles ,Mebude, Breckin, Dickson (Oboavwoduo 60), Bobb (O'Reilly 46), Borges
The EDS return to PL2 action on Saturday, 3 September with an away game at West Ham United.
Kick-off is 2pm.
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News about Mansfield v Man City
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