Huachipato, playing in the competition for only the second time and the first time since 1975, went ahead when Federico Falcone was left unmarked in the penalty area to fire home in the 16th minute of Thursday's game.
Gremio, the 1995 champions led by former Real Madrid and Brazil coach Vanderley Luxemburgo who has yet to win the Libertadores, fell further behind five minutes into the second half when Braian Rodriguez scored with a header.
Hernan Barcos pulled one back with a penalty four minutes later, scoring on his debut following his move from Palmeiras.
Argentine side Arsenal, making their debut in the tournament, finished with nine men as they lost 2-1 at Bolivian champions The Strongest at 3,600 metres above sea level in La Paz.
Alejandro Chumacero gave the hosts an early lead with a shot from outside the area but Arsenal appeared to be on top after Dario Benedetto levelled with a free-kick three minutes after half-time.
However, it all went wrong after Damian Perez was sent off for a second bookable offence and substitute Emilio Zelaya was given a straight red card for a tackle from behind after only six minutes on the field.
Luis Perez took advantage by netting the winner seven minutes from time in the Group Three match.
Newell's Old Boys beat Olimpia 3-1 in a clash of former Paraguay coaches Gerardo Martino, of Newell's, and Ever Almeida in Group Seven, while a Patrick Vieira goal gave Palmeiras a 2-1 win over Peru's Sporting Cristal in Group Two.
Palmeiras are in the Brazilian second division but qualified by winning the Copa Brasil knockout tournament.
