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A controversial late own goal condemned Rangers to a Champions League second-round defeat by Benfica and left their group stage hopes on a knife edge.
Two goals from Kayla McCoy looked to have earned the Scottish champions a draw to take to Lisbon.
But Benfica snatched victory when goalkeeper Victoria Esson was adjudged to have narrowly carried the ball over her own line after a wicked deflection.
Ana Vitoria had equalised, then put Benfica ahead in a thrilling game.
The sides will meet again next Wednesday, with Rangers still in the tie despite the late heartbreak.
Ibrox has witnessed its fair share of big European nights in the past. For Rangers Women, it was arguably the biggest tie in their history, and their first ever Champions League match on home soil.
However they looked nervy early on and Benfica, the Portuguese champions, should have led on 19 minutes when an unmarked Marta Cintra side-footed off the near post with the goal at her mercy.
Rangers weathered the storm and struck first when Brogan Hay picked out McCoy, who beat goalkeeper Rute Costa with a downward header at the near post.
And as the hosts' nerves began to erode, Jenny Danielsson should have done better than shoot straight at Costa when left alone outside the box.
But Rangers were caught napping when, from their own drop ball, Benfica stole possession and Vitoria played a one-two before racing into the box and finishing clinically into the far corner.
After the break Benfica again began to show their quality and Vitoria thumped a second goal into the roof of the net in between fine saves from Esson to deny Pauleta twice.
Yet, Rangers found an equaliser just two minutes after falling behind when McCoy raced on to Nicola Docherty's long ball and hammered home a left-foot shot.
Benfica were undeterred and continued to up the tempo, and eventually found a third in bizarre circumstances when Esson had to scramble back to try and stop Lisa Martinez's attempted clearance going in.
Rangers were adamant their goalkeeper had stopped the ball crossing the line, but the assistant referee gave the goal and Benfica saw the game out.
It leaves Rangers with it all to do in Portugal and the deficit could have been greater, but Lucia Alves rattled the crossbar late on as she let fly from 25 yards.
Player of the match - Brogan Hay
Rangers up against it, but prove their mettle - analysis
History was going to be made no matter the score. The fact Rangers, as title winners in Scotland, were playing a Champions League tie at Ibrox is a measure of both their progress and that of women's football in Scotland.
But the bar keeps going higher, and now Rangers have given themselves a chance of mixing it with Europe's elite in the group stages.
At times Benfica, who reached the group stage for the first time last season, looked a quality outfit, passed the ball extremely well, and definitely created the better chances.
It showed the task awaiting Rangers in the second leg is huge, but they were clinical when they got their opportunities and showed they have the players to compete at this level.
What's next?
Rangers host Motherwell in the Scottish Women's Premier League on Sunday (16:00 BST), then travel to Lisbon to face Benfica in the Champions League second leg on Wednesday (19:30 BST).
Line-ups
Rangers
Formation 3-5-2
- 22Esson
- 12McLauchlan
- 21Martinez
- 2Docherty
- 7HaySubstituted forOrschmannat 74'minutesBooked at 90mins
- 18Cornet
- 6Middag
- 23MacLeanSubstituted forWatsonat 71'minutes
- 24Kerr
- 20DanielssonSubstituted forArnotat 61'minutes
- 10McCoySubstituted forHowatat 74'minutes
Substitutes
- 1Fife
- 8Orschmann
- 9Howat
- 14Cavanagh
- 15Arnot
- 16Austin
- 26McLeary
- 27Nolf
- 28Watson
- 30Gray
- 35Inman
Benfica Women
Formation 3-4-3
- 66Campos Costa
- 3Silva Seiça
- 15da Silva Costa
- 71da SilvaSubstituted forSilva Sobrinhoat 45'minutes
- 13Sousa Alves
- 21Domínguez Encinas
- 6Martins FariaSubstituted forNegrãoat 90+2'minutes
- 17Norton
- 8da Silva CintraSubstituted forManjenje Nogueira Silvaat 83'minutes
- 10Kliemaschewsk de Araújo
- 20Lacasse
Substitutes
- 1Talbert
- 7Cantuário da Silva
- 11Negrão
- 14Costa Malheiro Dias Correia
- 28Silva Sobrinho
- 29de Sá Pessoa Brás Nogueira
- 33Pintassilgo
- 39Vilão Dias
- 77Manjenje Nogueira Silva
Referee:Ivana Martincic
Attendance:3,522