Bordeaux, the 2009 French champions, slumped to a 1-0 defeat at Ligue 2 Angers as only eight Ligue 1 clubs were left in the competition.
Fifth division Chambery, best known for its handball team, regulars in the Champions League, and surrounding ski resorts, sent the 3,500 strong partisan crowd at their tiny stadium wild after Remy Sahinovic converted the decisive spot-kick.
Chambery won the shootout 4-3 after the match had finished 1-1 after extra-time. Bruno Grougi had fired Brest ahead in the first extra period but Malick Faye equalised.
Fans ran onto the pitch to celebrate with the players, two weeks after Chambery knocked out Monaco in the previous round.
"It's fantastic, I can't find the words. It was very, very complicated when we fell behind," defender Fabien Tissot told Eurosport. "But we knew we could not surrender."
"We conceded only one goal against Ligue 1 sides in two 120-minute games. Bravo Chambery," added Sahinovic.
Chambery struggled to cope with Brest's power early on, but a series of superb saves by keeper Guillaume Benemou kept them in contention.
Benemou twice denied Benoit Lesoimier in spectacular fashion before half-time as the visitors piled on the pressure.
Chambery were transformed after the break with Aissa Yahia-Bey a constant threat. Yahia-Bey set up Stephane Chmielinski in the box, only for the 22-year-old electrician's shot to shave Steve Elana's post in the first half of extra time.
Grougi gave Benemou no chance in the 107th minute with a low cross shot from just outside the box but Faye, who made four Ligue 1 appearances with St Etienne last season, equalised with four minutes left when he latched on to Yahia-Bey's wayward shot.
In another upset, Bordeaux barely threatened Angers and the hosts were rewarded for their domination in the 65th minute when midfielder Sebastien Renouard fired home from 18 metres.
Nancy needed a Julien Feret double to see off Ligue 2 Nimes 2-1 after extra-time.
Mid-table Ligue 1 side Lorient needed extra-time to dispose of fourth division Fontenay Le Comte 1-0.
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