The reigning AFCON champions had not tasted defeat for over three years, but Esteban Obiang’s strike 20 minutes from time was enough to hand Nzalang Nacional a shock victory in Douala.
The defeat leaves Djamel Belmadi’s side with a mountain to climb to reach the knockout stages, with Mahrez and co. needing to beat the Ivory Coast in their final group match on Thursday to stand any chance of progression.
On an otherwise frustrating night for the City winger, Mahrez went close to handing his home nation the lead on three occasions before the half-time whistle.
Sofiane Bendebka was a matter of inches from latching onto the 30-year-old’s exquisite first-time ball on 20 minutes, before Youcef Belaili forced an impressive double save from the City man’s cutback soon after.
Algeria had the ball in the net moments later when Baghdad Bounedjah tapped home after Mahrez’s header was too hot to handle for Equatorial Guinea stopper Jesus Owono, but our no. 26 was caught out by the offside flag.
Djamel Belmadi’s side continued to dominate proceedings without truly threatening, but it was their opponents who would get their noses in front in an end to end second 45.
Josete Miranda's clever flick from a corner evaded the entire Algeria defence with 20 to play in Douala, allowing Esteban Obiang to rifle home at the far post.
The surprise opener brought Algeria back to life, as they laid siege to the Equatorial Guinea net in the hope of preserving their phenomenal unbeaten run.
A golden chance fell to substitute Islam Slimani, but he failed to make a clean contact on the ball from a promising position, while Belaili had a clinical finish ruled out by the offside flag a few minutes later.
A clever reverse pass from Mahrez into Youcef Atal carved out one final chance for the reigning champions, but match-winner Esteban Obiang’s miscued clearance whistled just past the far post to preserve Equatorial Guinea’s unlikely lead.
Defeat leaves Algeria at the foot of Group E with one point from their two matches so far, but they can still qualify for the knockout stages should they beat the Ivory Coast by two goals or more in their final group match this Thursday.