The Champions League holders have already qualified for the last 16 of the competition following their 3-0 win over Young Boys in their last match.
Many would have expected City to look comfortable and go for five wins in five from the off, but this is far from the case in the first-half.
Lois Openda opened the scoring for Leipzig after 13 minutes when he found the bottom corner from goalkeeper Janis Blaswich's long ball.
The 23-year-old doubled the German side's lead just after the half-hour mark, firing in after cutting onto his right following a solo run.
TV cameras were quick to pan to Haaland, who appeared bewildered at his side going two goals down on home soil.
READ MORE ON MAN CITY
Bernardo Silva opens up on dream next transfer after Man City as he rules out two clubs
Club World Cup 2023: Fixture dates, teams and host nation as Man City eye first title
City's superstar had a great chance to hit back for himself but his effort went blazing over the bar as Leipzig held on until half-time.
However, Haaland finally found the back of the net early in the second-half to reduce the deficit.
Phil Foden ensured that City were back on level terms as his composed finish found the bottom corner.
Leipzig briefly thought they went back in front but Liverpool loanee Fabio Carvalho's goal was ruled out for offside.
Most read in Champions League
Alexander Isak goes from zero to hero as he makes amends for shocking miss at PSG
Man City vs RB Leipzig: Champions look to stay perfect against Haaland's lucky team
PSG 1-1 Newcastle LIVE REACTION: Mbappe scores controversial late penalty after VAR howler
Footage shows Arsenal boss Arteta roll back the years with cheeky nutmeg on Odegaard
However, City did in fact take the lead late on as substitute Julian Alvarez fired in from inside the area.
Pep Guardiola's side have maintained their 100 per cent record in Group G with just one match left to play.