Villa had taken a 2-0 first half lead through Alisha Lehmann and Rachael Daly, before Laura Coombs struck to give City hope just before half-time.
Bunny Shaw headed in the equaliser, before Coombs grabbed her second to put City ahead in an action-packed clash.
However, Villa's Kenza Dali fired past Ellie Roebuck to square the game again, before Daly tapped in the winner to condemn Gareth Taylor's side to an agonising defeat.
STORY OF THE MATCH
Villa Park fell silent in honour of the late Queen Elizabeth II and the national anthem before kick-off, before City then sought to start the game on the front foot.
The first clear shot on goal came our way, as Chloe Kelly played the ball across the box to Lauren Hemp, and from just outside the penalty area, her strike went straight into the gloves of home keeper Hannah Hampton.
But despite City dominating the early possession, it was Villa that struck first.
Laia Alexiandri was intercepted deep inside our half by Daly with Lehmann picking up the second ball, driving into the box before finding the far corner of Roebuck's net.
We reacted well to Villa’s opener with Hemp, down the left, heading the ball to Coombs whose looping cross was met by Bunny Shaw, but her header dropped into the hands of Hampton.
Just 10 minutes after their first goal, the home side struck again. Villa capitalised on a failed clearance from a corner with the ball falling to Daly, whose acrobatic finish on the half turn flew past Roebuck to double Carla Ward’s side's lead.
Down at the other end, Kelly tried to get us back into the game as she drove past the Villa defence and tried her luck from far out but the effort fell into the arms of Hampton again.
Gareth Taylor’s side pushed late on in the half to try and respond, and on the stroke of the break, our efforts were rewarded.
Shaw did well to hold the ball up before flicking a pass through to Coombs.
The midfielder cut inside on her right foot and pulled the trigger, with her shot too hot to handle for Hampton, giving City hope for the second half.
City came out revived after the restart and came close to levelling when, from a corner, Steph Houghton headed the ball into the box with Shaw meeting the second ball but her effort went just over the crossbar.
Moments later, the same routine worked to great effect, as again from a corner, Houghton headed onto Bunny Shaw, whose header flew into the net to give City a deserved equaliser.
With Taylor's side on the ascendancy, the ball found itself on the right with Kelly, and her fine cross was brought down exquisitely by Coombs.
Her shot on the half volley rifled into the net to turn the game around inside just one minute and 20 seconds.
However, the home side’s pressing proved effective, and when Dali seized possession, she took a couple of touches before seeing a deflected shot ripple the net to draw the game level for a second time.
City were pushing to restore the lead and some neat wing play by Hemp saw her fire in a chipped cross-cum-shot which agonisingly evaded both City’s forward line and the goal.
Buoyed by the Villa Park crowd, Villa also sought a winner, and Dali played a ball through to Kirsty Hanson whose shot was spilled by Roebuck and Daly was at the right place at the right time to toe-poke the Villans into the lead.
The game was an end to end affair with Villa’s Hanson and City’s Esme Morgan both causing threats for Hampton and Roebuck respectively.
But City could not breach the Villa defence again, as we fell to an opening day defeat.
HOW WE LINED UP
Gareth Taylor selected Laia Alexiandri to make her WSL debut, while captain Steph Houghton and Esme Morgan both returned to the starting line-up after long absences.
Ellie Roebuck was selected between the sticks, with a back four of Demi Stokes, Alex Greenwood, Houghton and Morgan protecting her.
Aleixandri sat in a deep lying midfield role, with Laura Coombs and Filippa Angeldahl linking the midfield to the attacking line.
Lauren Hemp and Chloe Kelly took their positions on the wings with Bunny Shaw playing up front.
VILLA XI: Hampton, Pacheco, Turner, Patten, Mayling, Blindkilde (80' Gielnik), Corsie (C), Dali, Hanson, Daly (90+9' McLoughlin), Lehmann (80' Gregory)
SUBS: Leat, Goodwin, Rabjohn, McAteer
CITY XI: Roebuck, Stokes, Greenwood, Houghton (C), Morgan, Coombs, Aleixandri, Angeldahl (46' Fowler), Hemp, Shaw (70' Castellanos), Kelly (57' Raso)
SUBS: MacIver, Casparij, Ouahabi, Losada, Hutchings, Blakstad
Taylor’s side will look to bounce back next week as we travel to the capital to face Chelsea on Sunday, 25 September at 16:00pm (UK).
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