The Aviva Premiership pacesetters led 16-7 heading into the final quarter through Chris Wyles' ninth-minute try and the accurate kicking of Owen Farrell.
But they buckled as four-time European champions Toulouse launched a fightback founded on brute strength rather than guile with France number Louis Picamoles driving over.
With three minutes remaining Farrell attempted to snatch victory through an enormous penalty from inside his own half, only for the kick to fall just short.
Deep into injury time and following a rousing spell from his team-mates, the England fly-half lined-up a drop goal, but it failed to reach the posts.
Not only was it Saracens' first loss in seven matches, but in the final half hour they were overpowered in the way they have punished all opponents until meeting Toulouse.
The result puts the French club in the driving seat of Pool Three, but with Connacht and Zebre, two of the competition's weakest teams, completing the group, both clubs have a good chance of progressing to the knockout stages.
The eagerly-anticipated clash between two of the competition's favourites failed to match expectations, even if the 61,428 crowd - a British record for the pool stage - were subjected to a tense climax.
Lighting up Saracens' evening was the endeavour of wing Chris Ashton who was lively throughout, regularly testing Toulouse's defence in search of the try that his performance deserved.
Answering the call from England backs coach Andy Farrell to use the occasion to secure selection for next month's QBE Internationals, the 26-year-old all but guaranteed his place on the right wing against Australia in November 2.
He was involved in Wyles' try as space opened up on the right, swapping passes with the outside centre to create the gap for his team-mate to dart over.
There was a suspicion that Ashton's final pass was forward, but referee Nigel Owens was satisfied it had gone backwards.
Ashton appeared to have been hauled back illegally as he threatened to break through Toulouse's defence and then he dropped a difficult pass with the line beckoning.
Three successive missed penalties from Luke McAlister proved costly, but when David Strettle was sin-binned for tackling Yannick Nyanga without the ball the French club took their chance.
A line-out drive pierced the heart of Saracens' pack with giant prop Census Johnston providing the power and Tolofua touching down beneath a pile of bodies.
Scrum-half Jean-Marc Doussain took over the kicking duties and completed the conversion, but a brutal hit by lock Alistair Hargreaves on Nyanga put Saracens on to the front foot.
Farrell missed a penalty but went on to land two in rapid succession, the second coming after Ashton, running at full speed, had almost plotted a route through the white shirts.
Toulouse, trailing 13-7, lost McAlister to what appeared to be a shoulder problem and the second half opened with Saracens taking command.
Ashton continued to look lively, a low kick putting the visiting defence under pressure and when they collapsed a scrum Farrell kicked his third penalty.
The bulldozing Johnston helped put Toulouse on the front foot, but a promising attack ended when Farrell stole possession, winning a penalty in the process.
Saracens were spending an increasing amount of time defending and while they were protecting their whitewash brilliantly, pressure was mounting.
Doussain kicked a penalty and then disaster struck for the Aviva Premiership club when substitute Picamoles picked up from the back of a five-metre scrum and just managed to roll the ball on to the line.
The conversion was booted by Doussain and Saracens' brave late attempts to win through the boot of Farrell came up short.
In the night's other game, Leicester bounced back from their opening Heineken Cup defeat at Ulster with a convincing 34-3 victory over Benetton Treviso at Welford Road.
The Pool Five success maintained Leicester's 100 per cent record against Italian sides - played 19 won 19 - and also meant they had earned a bonus point in each of Treviso's four visits to Leicester.
Leicester's tries came from Thomas Waldrom, Tom Youngs, Blaine Scully and Adam Thompstone - with the last move of the game. Toby Flood kicked 14 points.
Tobias Botes kicked a penalty for Treviso, who had three players sin-binned, two in the space of two minutes in the second half. Leicester scored 14 points while the Italians were down to 13 men.
Leicester, already without several key players, including both first-choice centres, suffered another blow after just four minutes when Fijian centre Vereniki Goneva went off with a leg injury.
He was replaced by 21-year-old Kiwi Terence Hepetema, a recent signing from Australian side Waratahs, who was making his second appearance.
The teams were meeting at the pool stage for the fourth time and the fact that Leicester won only 14-13 away and 33-25 at home last year was a sign of the great strides the Italian side have made.
They made life difficult for Leicester in the first half with their direct running style but lost the ball in contact too often and trailed 13-0 at half-time.
Leicester fly-half Toby Flood kicked two penalties and also converted a try by number eight Waldrom.
Leicester came close to scoring in the 14th minute after Treviso lost the ball in the Tigers 22 and scrum-half Ben Youngs launched the ball upfield. Winger Scully won the race to the ball but was forced into touch by Christian Loamanu.
Flood, however, put Leicester ahead with his first penalty three minutes later and the English champions were left cursing pedantic French referee Pascal Gauzere who pulled Scully back in the act of scoring because a tap penalty had not been taken from the right spot.
Treviso lost fly-half Mat Berquist, who had missed with a long-range penalty early on, with an ankle injury and moments later were down to 14 men after scrum-half Tobias Botes was sin-binned for a shirt pull in front of the posts.
Flood kicked the penalty and, with just two minutes of the half left, Waldrom forced his way over after a second line-out and drive, with Flood adding the conversion.
Leicester started the second half strongly but had a try disallowed by the video referee after just four minutes. Lock Graham Kitchener stole a lineout and was driven over but after going upstairs the referee awarded Treviso a penalty.
Botes put Treviso on the scoreboard with a 47th-minute penalty but the visitors then shot themselves in the foot when captain Antonio Pavanello and winger Loamanu received yellow cards in the space of two minutes, the former for repeated offences, the latter for a high tackle on Scully.
They paid the price immediately, hooker Tom Youngs forcing his way over following a line-out and drive, with Flood adding the conversion.
And in the 65th minute Scully got Leicester's third try after a quickly taken tap penalty. Flood converted from the right touchline to make it 27-3.
It looked like Leicester would fail to land a crucial bonus point but in the final minute winger Thompstone stepped inside a defender to score his side's fourth try, with Flood adding the conversion.