England's players were shockingly booed once again by Hungarian football fans as they took the knee in Budapest, despite the stadium being filled with around 30,000 school children.
Hungary were the better team throughout the game and created some good chances against the Three Lions, who put in their most lacklustre display for many years.
West Ham star Jarrod Bowen was arguably the most exciting player on his England debut, having multiple chances to score on his first cap.
Chelsea's Reece James replaced Liverpool's Trent Alexander-Arnold with an hour gone and, just three minutes later, he gave away a penalty described as 'soft' by Dean Ashton on talkSPORT, after he fouled Zsolt Nagy.
Hungarian superstar Dominik Szoboszlai slotted the penalty past Jordan Pickford and into the bottom corner, which turned out to be the only goal of the game.
England had gone unbeaten in each of their last 21 matches in all competitions, but that has now come to an end after their defeat in the Puskas Arena.
Gareth Southgate's side made the trip to the Puskas Arena for their UEFA Nations League clash, in a contest that was to be played behind closed doors.
That suspension was handed to them by UEFA after their supporters' racist behaviour during Euro 2020, something which the pre-match jeers show they haven't learned from.
The first scare for England came after just 11 minutes when Hungary's star man Szoboszlai was found inside the area by an incredible pass by Loic Nego, who squared the ball across the box.
The RB Leipzig man, who missed the European Championships due to injury, then slid the ball under Jordan Pickford, only for Conor Coady to make a last-ditch clearance off the line.
Adam Szalai then nearly incredibly opened the scoring from the halfway line when he attempted to lob Pickford from distance, only for his strike to drop just wide of the post.
Debutant Bowen looked lively and had the Three Lions' best chances in the opening 45 minutes, but couldn't find the back of the net - something he did regularly for West Ham last season.
Arsenal youngster Bukayo Saka was brought on at half-time and nearly made an instant impact with a pacy, dynamic run through the Hungary defence, which ended with a good save from goalkeeper Peter Gulacsi.
A triple substitution was made by Southgate on the hour-mark, with James, John Stones, and Jack Grealish all coming on.
And just three minutes after his instuduction, the Chelsea defender gave away a penalty after a foul on Nagy, which Szoboszlai fired into the bottom corner.
"James doesn't make the right decision," Aston told talkSPORT. "He tries to control it, he tries to ease the striker away and gets his angles on wrong.
"It's a soft penalty, let's get it right. He leans on the player, but it's soft."
Bowen had the first chance after England went behind, but his volley was straight at Gulacsi.
Hungary should have made it 2-0 with five minutes to play when Pickford parried an effort straight to Andras Schafer, who shockingly sent it over the bar from close range.
It was a poor defeat for England, which they will be hoping to make amends for when they take on Germany on Tuesday.