The Boys in Green were expected to record a comfortable victory over the European minnows but fell to a 1-0 defeat in Yerevan.
Despite dominating possession with 68 per cent of the ball and having 13 efforts at goal, Stephen Kenny's side were made to rue a number of missed chances as Ireland's lack of composure proved costly.
After a wasteful performance, Eduard Spertsyan got the decisive goal for the hosts as a powerful drive beat young Liverpool goalkeeper Caoimhin Kelleher between the sticks.
As a result, Ireland have plenty of work to do in Group B1, with fixtures against Ukraine and Scotland scheduled for the coming weeks.
In addition to the uphill challenge that is ahead of them, a woeful defeat to Armenia has extended an unwanted record in UEFA's competition.
The Republic Of Ireland have played 11 matches in the Nations League since its inception, winning none in the process.
Not only that, but the luck of the Irish hasn't been with them in front of goal either, with Kenny's side scoring just two goals in that time.
Speaking after the match, Ireland boss Kenny said: "Obviously we lost the game, a tight game really overall. It's not a game that we deserved to lose, you couldn't say that on the balance of play or the balance of chances, but we've lost it and we've only got ourselves to blame, so we are disappointed.
"We've made life difficult for ourselves, but rather than focusing on that, we've got to focus on bouncing back on Wednesday.
"We've got two home games now, we need to dust ourselves down. We're disappointed with ourselves, we know it's a poor result, we're well aware of that."
However, in stark contrast, Armenia coach Joaquin Caparros was quick to hail the historic result.
He said: "I am very pleased with the way we played in the second half. I have to praise my players because it's a very good result for our team.
"It's one of the greatest victories of the Armenian football team because Ireland is a very good team."