Gylfi Sigurdsson's second-half penalty proved the difference as Iceland beat 10-man Netherlands 1-0 in Eindhoven in Thursday's Euro 2016 qualifier to hand new Oranje coach Danny Blind a dismal debut.
Sigurdsson put the visitors ahead six minutes into the second half after Gregory van der Wiel had brought down Brikir Bjarnason in the area.
Netherlands had suffered an early setback when in the 33rd minute defender Bruno Martins Indi was shown a straight red following a strong challenge on Kolbeinn Sigthorsson.
Iceland were unlucky not to double their lead in the 53rd minute when Johan Berg Gudmundsson's left-footed attempt from 20 yards rattled the left-hand post with Netherlands goalkeeper Jasper Cillesen beaten.
The outcome has lifted Group A leaders Iceland eight points clear of third-placed Netherlands with three games remaining.
The Czech Republic, who beat Kazakhstan 2-1 on Thursday, are second in the pool, two points adrift of Iceland and six clear of the Oranje.
Netherlands went into the encounter in desperate need of points to remain in contention for a place in next year's top tournament.
Blind, who took over from Guus Hiddink as national coach in July, fielded a 4-4-2 formation with Klaas-Jan Huntelaar playing alongside Manchester United's Memphis Depay in attack.
The home side enjoyed a strong start and Arjen Robben, named as captain for the first time, hit a 30-yard attempt that was saved by Iceland goalkeeper Hannes Halldorsson.
Shortly afterwards, Robben's powerful header from the heart of the area went off target.
In the 18th minute, Robben's 25-yard free-kick went just wide of the far post.
The hosts were forced to make their first substitution in the 31st minute with Luciano Narsingh replacing an injured Robben.
And two minutes later Netherlands had Martins Indi sent off for a late tackle on Sigthorsson.
In the 37th minute, Depay's curled free-kick was kept out by Halldorsson.
Shortly afterwards, Blind made a tactical substitution with Jeffrey Bruma coming on in place of Huntelaar.
Netherlands could have gone into the break with a 1-0 lead but Wesley Sneijder's bullet strike from 20 yards was met by a fine save from Halldorsson..
Having failed to test Cillessen in the opening half, the visitors produced a strong second-half display.
Two minutes after the restart, Ari Freyr Skulason went past his marker and saw his left-footed shot from the edge of the area go wide.
The referee pointed to the spot in the 50th minute after Van der Wiel brought down Bjarnason in the box.
Cillessen guessed correctly but could not get a touch on Sigurdsson's spot-kick towards the far post.
Netherlands almost went 2-0 down soon afterwards but Gudmundsson's attempt struck the post, much to the relief of the home fans.
The hosts pushed forward more aggressively and were almost rewarded in the 79th minute.
Narsingh set up Georginio Wijnaldum in the box but his right-footed shot towards the near post was saved by Halldorsson.
Halldorsson made sure his team secured three points when he twice kept out Sneijder's fierce drives from outside the area in the final stages of the game.