Atletico coach Diego Simeone opted to rest numerous key men following their 1-0 UEFA Champions League win over Milan and with Real Madrid up next in La Liga, but that decision backfired.
Alvaro Cejudo fired Osasuna into a sixth-minute lead as he buried Emiliano Armenteros' corner at the back post. Armenteros added a second in the 21st minute and he did so in style as he lashed in a fierce strike from 25 yards.
The visitors found Osasuna particularly difficult to break down and three minutes prior to the break the El Sadar crowd were cheering for a third time as Roberto Torres steered Damia's left-wing cross past the helpless Thibaut Courtois with precise header.
Simeone made changes at half-time and early in the second period, but his efforts were futile as Osasuna held on to the three-goal margin with relative ease, moving them seven points clear of the bottom three, while Atletico end the weekend three points behind leaders Real.
Athletic maintained their three-point lead over bitter rivals Real Sociedad in the race for fourth place with a routine 2-0 win at nine-man Real Betis.
Iker Muniain got the first from the penalty spot after Kike Sola was tripped by Damien Perquis, who received a second yellow card seven minutes later.
Chilean midfielder Lolo Reyes also picked up a second booking in the second half as Betis went down to nine men and Guillermo's first La Liga goal wrapped up the win in the 81st minute with a header at back post.
Valencia came from behind to steal a late 2-1 win over visitors Granada after Piti initially opened the scoring in the 47th minute.
Paco Alcacer guided Sofiane Feghouli's cross in to level the score 64 minutes in and Ruben Vezo netted his first goal for the club with a 91st-minute tap-in.
Unai Emery's Sevilla contested Sunday's early kick-off at Rayo Vallecano and put their six-match winless La Liga run behind them with a 1-0 victory.
The same fixture last season saw Sevilla miss two penalties in a 0-0 draw, but Coke's 57th-minute strike against his former side was enough this time around, despite the injured Vicente Iborra getting controversially sent off for time wasting while being substituted.
