Wales squandered a 21-point second-half lead to lose 39-34 to Australia at the Principality Stadium in Cardiff in a defeat that will further increase the pressure on head coach Wayne Pivac.
Jac Morgan scored two tries to help put Wales in a commanding position after 52 minutes, but Lachlan Lonergan completed a stunning late comeback to snap Australia's three-match losing run and inflict a ninth loss in 12 Tests on Pivac's side.
Morgan added to his double against Georgia by dotting down inside 10 minutes against Australia, either side of two penalties for Ben Donaldson, before Taulupe Faletau powered through a couple of Australian tackles to slide into the corner for a try on his 100th Test.
Gareth Anscombe added to that tally with a couple of penalties as part of a 10-point haul in the first half, though Folau Fainga'a touched down prior to half-time to reduce Wales' lead to two points.
Jake Gordon and Tom Robertson was sin-binned either side of half-time and Australia were made to pay when Morgan found the chalk from a driving maul, and the hosts were further ahead when Rio Dyer found the corner after a well-worked move.
Mark Nawaqanitawase revived Australia's hopes by twice crossing over and Wales themselves lost their discipline as Justin Tipuric and Ryan Elias were yellow carded, with the referee also awarding a penalty try after the latter deliberately collapsed a driving maul.
Wales still had a two-point lead to protect with a minute remaining, but Lonergan walked in a dramatic last-gasp try following yet more good play from Nawaqanitawase, allowing Noah Lolesio to add the game-sealing extras.