By Phil McNulty
England's Wayne Rooney is dejected at the final whistle
Steve McClaren's side looked on course to qualify courtesy of Wayne Rooney's spectacular 29th-minute volley.
Steven Gerrard missed a glorious chance before Roman Pavluchenko scored from the spot after 69 minutes following Rooney's foul on Konstanin Zurianov.
He struck again from close range four minutes later - now Russia will qualify if they beat Israel and Andorra.
It capped a dramatic turnaround on the Luznikhi Stadium's artificial pitch after England had looked in no trouble until Russia coach Guus Hiddink introduced Pavluchenko in the second half.
England as expected, were without captain John Terry after he suffered a recurrence of his knee injury in training and Sol Campbell came in as replacement.
McClaren will have been peturbed to see the synthetic surface being heavily watered before kick-off, a move clearly designed to make conditions more favourable for Hiddink's side.
Russia had plenty of possession in the early exchanges but England's revamped defence, with Everton's Joleon Lescott in for injured Ashley Cole, protected keeper Paul Robinson.
England suffered an anxious moment after 11 minutes when Aleksandr Kerzhakov tumbled under a challenge from Joe Cole but Spanish referee Luis Medina Cantalejo rightly ignored their penalty claims.
Robinson was called into action when he turned a low drive from Zurianov on to an upright in the 25th minute - and four minutes later England were ahead.
Michael Owen met Micah Richards' punt forward with a prodigious leap, and Rooney was lurking to chest down and lash a brilliant volley high past Russia keeper Vladimir Gabulov.
England survived in comfort until half-time, and should have doubled their advantage four minutes after the interval.
Gareth Barry's free-kick found captain Gerrard totally unmarked at the far post, but he steered a tame finish wide with the goal at his mercy.
And Richards just failed to apply the finishing touch to a Rooney flick as England tried to seal the three points.
Russia took advantage of England's generosity in front of goal to turn the game on its head in the space of four minutes.
Rooney was the villain after 69 minutes, hauling down Zurianov to concede a penalty, even though the initial offence took place outside the area.
Substitute Pavluchenko slammed home the penalty and struck again after 73 minutes, pouncing to score from close range after Robinson parried Alexei Berezutsky's shot.
The dramatic turn in fortunes forced McClaren into a triple substitution, sending on Peter Crouch, Frank Lampard and Stewart Downing for Lescott, Cole and Shaun Wright-Phillips.
But it was Russia who almost added a third when a rebound off Rio Ferdinand bounced inches wide with Robinson beaten.
England threw everything forward in the closing stages, but Russia held out.
Russia: Gabulov, Alexei Berezutsky, Ignashevich, Vasili Berezutsky (Torbinsky 46), Aniukov, Zurianov, Semshov, Bilyaletdinov, Zhirkov, Arshavin (Kolodin 90), Kerzhakov (Pavluchenko 58).
Subs Not Used: Malafeev, Pogrebniak, Shirokov, Sychev.
Booked: Vasili Berezutsky, Pavluchenko.
Goals: Pavluchenko 69 pen, 73.
England: Robinson, Richards, Ferdinand, Campbell, Lescott (Lampard 79), Wright-Phillips (Downing 80), Gerrard, Barry, Cole (Crouch 80), Rooney, Owen.
Subs Not Used: James, Shorey, Luke Young, Neville.
Booked: Ferdinand, Rooney.
Goals: Rooney 29.
Att: 84,700
Ref: Luis Medina Cantalejo (Spain).
England's qualification for UEFA Euro 2008 is in doubt after a 2-1 defeat to Russia.

 scored two goals in the second half today, although both sides had their chances.

Russia had a penalty appeal turned down by the Spanish referee after eleven minutes, while Konstantin Zyrianov saw his drive pushed onto the goalposts by England's goalkeeper Paul Robinson. Needing to win on an artificial pitch in Moscow to be certain of qualification, England took the lead after 29 minutes when Wayne Rooney opened the scoring with a volley.

Both Steven Gerrard and Micah Richards missed chances to seal victory for England, and Russia equalised with a Roman Pavlyuchenko penalty after Wayne Rooney brought down Konstantin Zyrianov. England manager Steve McClaren said the penalty shot was a 'disgraceful' decision, as the offence appeared to have happened just outside the penalty area. Pavlyuchenko scored Russia's winner just four minutes later.

England have one match remaining against  leaders Croatia on November 21, but the defeat to Russia means that other results must go their way if they are to qualify for next year's tournament in Austria and Switzerland. Russia will qualify ahead of England if they defeat both Israel and Andorra in their final two matches.