RB Leipzig suffered a severe blow in their pursuit of Bundesliga leaders Bayern Munich as resurgent Hamburg stunned them with a 3-0 win at the Red Bull Arena.
Markus Gisdol's men made it three consecutive wins in all competitions and moved out of the bottom three thanks to first-half headers from Kyriakos Papadopoulos and Walace before substitute Aaron Hunt added a third shortly after his stoppage-time introduction.
Bayern Munich's late win over Ingolstadt means Carlo Ancelotti's men now hold a seven-point advantage at the summit.
Papadopoulos spent the first half of the season on loan at Leipzig but, as he did against parent club Bayer Leverkusen last week, the Greece international returned to haunt one-time team-mates by powering home a 17th-minute header from Nicolai Muller's corner.
Leipzig failed to address those set-piece frailties and Walace made it two in almost identical fashion seven minute later.
Teenager Dayot Upamecano was substituted after half an hour of his full Bundesliga debut by home boss Ralph Hasenhuttl and his replacement Yussuf Poulsen, having struck the outside the post with a superb effort, made way before half-time through injury.
Leipzig made most of the running after the break, with Naby Keita and Emil Forsberg to the fore, but Dennis Diekmeier hit the bar on a Hamburg breakaway and Hunt completed the victory late on when he was unselfishly teed up by the excellent Muller.