At a glance
Rampant Hearts powered eight points clear of their Glasgow rivals at the summit of the Scottish Premiership to strengthen their early title credentials and worsen the struggles around Brendan Rodgers' side.
A superb goal from Kyziridis and a spot-kick from Shankland gave the Hearts team a two-goal advantage that the reigning champions could not recover from.
Dane Murray - among three youth players in the Celtic starting lineup - scored an own goal early on to put the home side ahead at a energetic their home ground, and it was the youngster's infringement that led to the spot-kick.
A stylish finish from McGregor of the season had swiftly equalized Hearts' opener, and the Swedish attacker almost put Celtic in front, choosing placement over power and allowing Alexander Schwolow to make a crucial stop.
But Derek McInnes' irrepressible Hearts seized control again to hand the visitors to successive league defeats for the first time since last year.
It also gives the Edinburgh side a significant lead at the summit.
The previous occasion they were so far clear was in the 2005-2006 season under their former manager, when they ultimately finished second - a rare instance that a team has not secured the title after building such an advantage in the past 27 years.
The Hearts coach, whose Aberdeen side were second to Celtic on four occasions, has been at pains to downplay title talk, as the club seek their first top-flight crown since the 1960s.
Rodgers has seen it all before at the club - both flawless and stuttering starts to a season. He's never ended as runner-up.
But on Sunday's evidence, this Hearts team showed they need to be taken seriously.
Hearts started with the self-assurance of a side unbeaten in the league this season - fans' favourite Kyziridis delivered a ball for Shankland to stab wide.
Celtic didn't aid their cause with some uncharacteristic carelessness in possession and they faltered under their first real examination.
A headed effort from Braga was tipped onto the woodwork by the Celtic keeper and the follow-up from Shankland was diverted goalwards by the unfortunate Murray, in for the absent center-back.
Celtic grew into the contest and started building moves. From one such move, the midfielder released Tierney to set up McGregor, who slotted home.
Aside from the Nygren chance, Celtic found it hard to generate chances for striker Kenny or his replacement Shin Yamada amid the absence of injured forwards their key strikers.
Hearts regained their intensity and versatility in creating chances in the opposition half. The Greek forward, one of the finds of the club's scouting network, struck low past Schmeichel from the edge of the box.
Almost straight away, Murray tripped the midfielder in the right side of the box and the penalty taker scored. And it could've been an even more handsome win, had replacement Ageu not been denied by Schmeichel.
Celtic's second half was partially encapsulated in a couple of moments involving big-money recruit Engles.
The midfielder's wayward free-kick delivery was in sharp opposition to his European display in the Europa League win over Sturm Graz and the national team player was then booked for a cynical foul.
Hearts head coach Derek McInnes: "You see how hard the players work, the togetherness. That's not always enough to win games consistently.
"What we have got, is good technical ability. You're seeing that from multiple individuals who have been here before. Recent additions are eager to show that.
"We've got a good thing going at the minute, but it's only three points. It's crucial for us to keep winning. We've got loads to do, plenty to improve. Following the initial fixtures is normally an indication of your standing."
Celtic manager Brendan Rodgers: "The second goal was disappointing from our perspective. We failed to push up when the ball went back as a line so when they play it, they ought to be caught offside but didn't. We have got to improve with the attempt.
"Plenty of matches to play for. It's only the beginning. It's just nine matches. Clearly, being eight points behind is not ideal. The positive is there's numerous fixtures to play.
"Our attention must turn on the here and now and look to find more consistency and better performance in our play."
Celtic are back at home on Wednesday against newly-promoted Falkirk (19:45 GMT). At the identical hour in the top division, Hearts are at their opponents' ground.
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