Madrid was reduced to 10 men shortly before the break before the Ivorian striker secured a deserved three points for Juan Ignacio Martinez's side.
A Sami Khedira sending off shortly before the break set the tone for an insipid second half showing from the Bernabeu outfit, and Arouna Kone struck with 20 minutes remaining to secure an unexpected but deserved three points for the hosts.
Jose Mourinho’s men traveled to Valencia looking to reassert themselves as the league’s dominant force, having seen Barcelona humiliate Osasuna 8-0 on Saturday and started with an endeavor befitting a side with a point to prove.
The capital outfit probed in the early exchanges and settled into proceedings well, despite talisman Cristiano Ronaldo starting on the bench, having not recovered from an ankle injury picked up in the side’s 1-0 win over Dinamo Zagreb on Wednesday.
The breakthrough looked to have been made after only eight minutes when Angel Di Maria’s free kick was spilled by Gustavo Munua in the area, but as Karim Benzema pounced to slam the ball home, the linesman raised his flag to see the strike disallowed, with Pepe having been caught offside.
The exigency of the hosts’ defensive task was being heightened by a shaky performance by Munua, who fumbled yet another ball on the 25th minute before Coentrao squared to Benzema, only for the Frenchman to see his effort blocked on the line by Ballesteros.
It was an affair bordering on the tedious but it was to take a chaotic turn shortly before the break as a melee erupted following a Di Maria challenge on Juanfran. Khedira was to suffer most, being sent off for a second bookable offense for pushing Ballesteros over and yellow cards were also distributed to the 36-year-old defender, Iborra, Di Maria and Valdo.Mourinho's intentions were clear as the second half began, with Ronaldo replacing Benzema off the bench.
The impact of the Portuguese wasn't to prove instant however, as Levante grew in poise as the second period wore on, seemingly seeing the club's chance of victory bolstered by the Germany international's red card and the team's confidence was to prove justified, with Kone the beneficiary of a fine counterattacking run from Javi Venta, smashing it home after picking up a squared ball from the fullback.
It was a deserved breakthrough, and Madrid's response was untypically sluggish, with little threat coming the way of Munua.
Mourinho's side was ominously blunt as the closing stages played out with no goalmouth action and with Barcelona having looked so imperious against Osasuna on Saturday, the Portuguese boss will have been troubled by a defeat that leaves his side a point behind Pep Guardiola's men.