Brazil were heartbroken in the final moments as a winner from Nicolas Lopez gave Uruguay all three points in their second group match.
With the game heading for a draw, he struck in the 90th minute to send all three points to the Uruguayans.
Brazil had clawed back a two goal deficit thanks to Marcos Junior and Fred cancelling out Diego Laxalt and Diego Rolan’s strikes either side of half time.
The loss sees Brazil experience similar fortunes to Argentina. They went into the competition as solid joint favourites but the competition has proved stiff so far.
Watch full video highlights of their match with Uruguay here.