Karlsruhe inflicted a first defeat of the season on Wolfsburg thanks to second-half goals from Massimilian Porcello and Sebastian Freis.
The duo were on target in the 51st and 75th minutes respectively before Ricardo Costa pulled one back for the Wolves, who had earlier lost striker Grafite to a red card.
Felix Magath had called for his team to take home three points, and it was all Wolfsburg in the first half with Grafite wasting two opportunities when he twice faced Martin Miller in one-on-one situations.
The Brazilian first fired over from 14 yards out in the 22nd minute and 10 minutes later, it was the Karlsruhe goalkeeper who diverted a powerful shot from a similar position on the left over the bar.
Christian Gentner also came close with a blast from 20 yards out while Karlsruhe's only chance in the first half came through Antonio da Silva, whose curled effort flew inches past the top left corner of the goal.
Karlsruhe surprisingly grabbed the lead six minutes into the second period though when Porcello hammered home a free-kick through the wall and into the back of the net.
Wolfsburg moved up a gear in response, but Zvejzdan Misimovic and Ashkan Dejagah both failed to get the ball past Miller.
Substitute Edin Djeko then wasted two promising chances in the air, having a powerful header plucked off the line before nodding inches over.
And the Wolves soon found themselves a man down when Grafite picked up two bookings in quick succession, the second one coming in the 71st minute after a clumsy tackle on Miller.
It took Karlsruhe just four minutes to take advantage as Alexander Iashvili delivered a nice chip from the left on a counter-attack with Preis available to sweep the ball home and make it 2-0.
Substitute Costa then pulled one back for Wolfsburg in the 79th minute - just seconds after his arrival on the pitch - when he was left unmarked on the far post.
But Misimovic missed the chance to equalise when he misfired from 15 yards out allowing Karlsruhe to secure an important win.
The win was marred though by a late injury to keeper Miller, who was stretchered off the pitch with a suspected concussion following a collision with Mahir Saglik.