For the first time in 25 years, the once untouchable franchise was defeated by the Reds in Christchurch, suffering a 33-28 defeat, their eighth defeat of the season.
New Australian superstar Tim Ryan backed up his stunning debut against the Blues last weekend with a brace, taking his tally to five tries in two games.
Adding to the Crusaders' misery, skipper Scott Barrett was forced off the field early due to injury.
Reds skipper Liam Wright told Sky Sport they needed to bring physicality and his side did just that.
“The guys really came together after a season of short losses. We did a great job of hanging in there. There were some big moments from our big players and we talked about that throughout the week, managing our moments.”
Crusaders first five David Havili said it was another disappointing result for the proud franchise.
“They just got to our breakdown in the first half and from then on they were in the game and we had a few sloppy moments where we couldn't really perform, but they came to play tonight and you can't sleep on the Reds.”
Despite the challenge they now face as 10th in the table, he remained optimistic about reaching the play-offs.
“We have been working hard behind the scenes and I am proud of what we have done in recent weeks. We have to shape ourselves for next week.”
It looked like the Crusaders had struck first after Havili threw a brilliant long ball, picking off several Reds and finding Grace unmarked on the wing. However, the try was canceled due to a slight damper earlier in Mitch Drummond's move.
Things didn't get better for the hosts from there as Barrett left the park due to a back injury and debutant Leigh Halfpenny got his first chance for points in a Crusader's jersey.
It was ugly early on from both sides, with eight penalties awarded in the opening sixteen minutes.
The match eventually ignited when Reds fullback Jock Campbell made a break to get into the 22, while flanker Fraser McReight crashed for the first attempt.
They backed it up with a bang, sparked again by Campbell, as the Reds showed great patience and excellent interplay to get Ryan over.
The Crusaders continued to close out, and after thirteen phases without reward, a subsequent penalty saw them finally beat the Reds, through Dallas McLeod from close range, with his side trailing by seven at half-time.
It took just over two minutes for the Reds to reassert their dominance in the second, rejecting a penalty in front of the posts and opting to tap in Jeffery Toomaga-Allen, then throw a dummy from the base of a ruck and dive over.
The Crusaders came close on successive attacks into Reds territory as first Levi Aumua and then Jamie held Hannah over the line.
They would find the line in clinical fashion shortly afterwards, through Corey Kellow as he finished off a slick set-piece move sparked by a Reece break.
A thunderous run from Aumua put the Crusaders on the attack again, and they tied up the scores with a dubious try on strange, unclear replays, awarding the try.
After Christie pulled his side out of a clash with a thief in front of his posts, Havili got his nod from Harry Wilson, who rallied again to score and regain the lead.
The Reds again extended it to two tries through Ryan, with the fleet-footed winger accelerating after grabbing a kick for his double.
The Crusaders weren't done yet though as replacement halfback Noah Hotham exploded through the line and connected with Reece gassing the cover, leaving the home side five points behind with five to play.
A breakaway from kick-off sent the Crusaders flying 80 yards up the pitch, but the Reds' desperate defending saw them survive for a famous victory.
Scorers:
Reds 33 (Ryan, McReight, Toomaga-Allen, Wilson, tries, Creighton 4 cons)
Crusaders 28 (McLeod, Kellow, Strange, tries, Halfpenny 1 con, Fihaki 3 cons)