Goals from Emmanuel Mayuka and Rainford Kalaba ensured a sensational start to the finals after success earlier on Saturday for co-hosts Equatorial Guinea on their tournament debut.
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Swift counter-attacks combined with sloppy defending allowed Zambia to burst into an early lead and they weathered a second half fight back to upset the odds.
Mayuka headed the opener after 12 minutes followed by a breakaway goal for Kalaba nine minutes later.
Mayuka's goal showed up vulnerabilities in Senegal's imposing back-line with the diminutive Zambia players outjumping and outmuscling their bigger opponents for the ball.
Senegal were also caught for pace. Zambia captain Chris Katongo threaded the ball through for Kalaba to beat the offside trap for the second goal as Senegal's defence looked static.
The stunned Lions of Teranga might have given away a third goal five minutes before half-time were it not for a fine save by their American-based goalkeeper Bouna Coundoul.
But with two changes for the start of the second half, Senegal took the initiative and saw Moussa Sow and Demba Ba miss from close range before Ba again hit the bar with a header.
Substitute Dame Ndoye scored with just over 15 minutes to go by chesting the ball down and turning it home from an acute angle but in the end his effort was only a consolation.
Senegal's impressive form in the qualifiers had left them highly fancied to dominate the group and challenge for the title but they must now beat Equatorial Guinea in Bata on Wednesday to stay alive.
Equatorial Guinea upset Libya 1-0 in the opening Group A match in Bata on Saturday.
