Key points
Rampant Hearts surged eight points clear of their Glasgow rivals at the summit of the Scottish Premiership to bolster their early-season title credentials and deepen the malaise around the Celtic team.
Alexandros Kyziridis' fine strike and Lawrence Shankland's penalty gave Derek McInnes' side a 3-1 lead that the title holders could not recover from.
Dane Murray - among three youth players in the Celtic starting lineup - scored an own goal in the early stages to put Hearts ahead at a energetic their home ground, and it was the youngster's infringement that led to the penalty.
A stylish finish from McGregor of the season had swiftly equalized the first goal, and the Swedish attacker almost put Rodgers' team in front, opting for finesse over power and allowing the Hearts keeper to make a crucial stop.
But Derek McInnes' irrepressible Hearts seized control again to consign Celtic to back-to-back losses for the initial occasion since 2023.
It also gives the Edinburgh side a significant lead at the summit.
The previous occasion they were this far ahead was in the 2005-2006 season under their former manager, when they ended as runners-up - a rare instance that a team has not secured the title having held such a lead in the last three decades.
McInnes, whose former team were runners-up to the champions on multiple times, has been at pains to downplay title talk, as Hearts seek their first top-flight crown since the 1960s.
The Celtic boss has experienced this previously at Celtic - both flawless and stuttering starts to a season. He's never ended as runner-up.
But on Sunday's evidence, this Edinburgh outfit showed they deserve serious consideration.
Hearts started with the confidence of a side undefeated in the league this season - the popular attacker delivered a ball for the striker to stab wide.
Celtic didn't help themselves with some unusual sloppiness in possession and they faltered under their initial test.
Claudio Braga's header was tipped onto the woodwork by the Celtic keeper and the follow-up from Shankland was turned into the net by the hapless defender, in for the absent center-back.
Celtic grew into the contest and started stringing passes together. From one such move, Sebastian Tounekti released the full-back to set up McGregor, who rolled in.
Aside from the Nygren chance, Celtic found it hard to generate chances for striker Kenny or his substitute Yamada amid the absence of injured forwards their key strikers.
The home team rediscovered their energy and versatility in creating chances in the opposition half. The Greek forward, a standout performer of the club's relationship with shareholder Tony Bloom's Jamestown Analytics, fired a low shot past the goalkeeper from the edge of the box.
Almost straight away, Murray tripped Braga in the right side of the box and Shankland scored. And it could've been an even more handsome win, had replacement Ageu not been denied by Schmeichel.
Celtic's second half was somewhat summed up in a couple of moments involving record signing Arne 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 yellow-carded for a cynical foul.
The Hearts manager: "The effort from the squad is evident, the togetherness. That's not sufficient on its own to win games consistently.
"Our strength lies in, is skillful players. You're witnessing it from multiple individuals who have been here before. Some of the new signings 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 maintain this form. We've got much work ahead, loads to do. Following the initial fixtures is typically a benchmark of where you are."
The Celtic boss: "It's a really poor goal from our perspective. We failed to push up when the play was recycled as a line so when they pass the ball, they ought to be caught offside but didn't. We have got to do better with the shot.
"There's still so many points to play for. It's still so early. It's only nine games in. Clearly, being eight points behind is not what we would want. The comfort is there's numerous fixtures to play.
"We now have to focus on the present 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 St Mirren.
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