Holger Osieck's side had hoped to confirm progression to the fourth round of qualifiers but that was put on hold after a surprise defeat in Muscat to Paul Le Guen's outfit
The home side settled in early to take an unexpected lead with a cleverly constructed goal finished off by Amad Al Hosni. The win sees Paul Le Guen's men move up to third in Group D while the visitors were unable to prematurely ensure their progression to the next stage of the qualifiers.
The Socceroos dominated the opening minutes of the game with the first chance coming in the seventh minute from a powerful drive by Carl Valeri, before deflecting safely into the hands of keeper Ali Al Habsi.
The Omanis then found their rhythm on 17 minutes with a clever through ball to Al Hosni, exposing the out of position Rhys Williams, before he coolly slotted past Mark Schwarzer for the opening goal of the game.
Hussain Al Hadhri almost extended their lead just two minutes later when a dipping free-kick was met with a superb low diving save by the Australian keeper.
The first half saw the Socceroos hold on to most of the possession but were unable to convert due to poor finishing with efforts going well off target by Luke Wilkshire and Harry Kewell before the break, while Brett Holman had a goal ruled out for offside.
Williams unleashed a wicked strike from range early in the second stanza which forced a good save out of Al Habsi as Australia searched for an equaliser.
AZ Alkmaar man Holman missed a glorious opportunity to level the game on 68 minutes when a Wilkshire cross glided passed the Omani defence in front of goal before slipping out of reach of the striker.
Robbie Kruse also had a desperate injury-time effort sail well over the bar, as Oman continued their resolute defensive display until the final whistle to secure a famous victory.
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