Spain struck twice in the final 20 minutes as goals from Mario Gaspar and Santi Cazorla ended England’s 15-match unbeaten run in Alicante on Friday.
Villarreal right-back Gaspar scored a sensational volley to open the scoring when he swivelled in mid-air to turn home Cesc Fabregas’s pass.
And Cazorla sealed the win for the European champions when he slotted home from the edge of the area six minutes from time.
“It is a prestigious result against a very strong team that threatened us the whole game,” said Spain coach Vicente del Bosque.
England boss Roy Hodgson meanwhile lamented his side’s inability to take advantage of their few counter-attacking opportunities.
“The assessment of the result is it is obviously disappointing to lose,” said Hodgson.
“For 70 minutes I thought we worked hard defensively. We always knew how good they are at keeping the ball.
“We were hoping that on a counter-attack we could cause them some problems. We had moments in the game, but we didn’t profit from those moments.”
Hodgson kept his pre-match promise to leave captain Wayne Rooney on the bench with Harry Kane and Ross Barkley given their chance to shine.
And it was the visitors who had the first two openings, but neither Raheem Sterling nor Barkley could find the target when well-placed on the edge of the box.
Barcelona defender Gerard Pique was once again whistled by some of the home support for his disparaging comments towards Real Madrid in recent months.
However, he nearly provided the perfect response as his deflected effort from 20 yards looped inches wide on 15 minutes.
Sergio Busquets then volleyed just off target from a corner as Spain began to take control of the game.
However, Vicente del Bosque’s men suffered a blow when Thiago Alcantara hobbled off with a knee injury midway through the half to be replaced by Cazorla.
Del Bosque had surprisingly chosen to play two strikers in the form of Paco Alcacer and Diego Costa and both came close to the opener before half-time.
Alcacer had the best opening when he was played in by a lovely through ball by Andres Iniesta, but pulled his shot across Joe Hart’s goal and beyond the far post.
Costa yet to score home-goal for Spain
Costa’s search for an international goal on Spanish soil continued when his curling effort flew past Hart’s far post.
Iker Casillas was finely forced into action 10 minutes before half-time when he trapped Kane’s weak effort before Fabian Delph tested the Porto keeper more seriously with a fierce drive that Casillas collected at the second attempt.
Costa had the first chance of the second period, but saw his shot smothered behind before another disappointing display at international level was brought to a premature end when he was replaced by Juan Mata 25 minutes from time.
Hodgson introduced Tottenham duo Dele Alli and Eric Dier with the latter making his senior international debut.
But it was their club teammate Kane who came closest to opening the scoring for England when his shot from range flew just wide 23 minutes from time.
Gaspar decided the contest with a rare moment of quality four minutes later when he acrobatically connected with Fabregas’s chipped pass to send a looping volley over a helpless Hart.
The Manchester City keeper did well moments later as he scampered from his line to prevent Mata doubling Spain’s advantage.
Hodgson brought on Rooney for the final 15 minutes in search of an equaliser.
Instead, England were caught short at the other end when Cazorla rolled the ball into the bottom corner from Nolito’s cut-back.
Rooney clipped the top of the crossbar and Casillas made his best save of the night from Kane in stoppage time, but it was too little, too late from Hodgson’s men who slumped to their first defeat since exiting the World Cup to Uruguay last June.