At a Glance
The London club's hopes of securing a place automatically for the European Cup knockout stages were hit hard as Atalanta came from behind to win in their home stadium.
Each club entered this game with the same records in the initial stage of this year's competition, having won, tied one, and suffered one defeat to sit on 10 points.
For much of the game there was not much to choose between them in this encounter too, even though Chelsea got their noses in front in the opening 45 minutes when Joao Pedro finished the captain's cross.
But Atalanta consistently appeared a danger going on the attack, with ex- Premier League attacker Ademola Lookman problems for the backline.
James fired wide in the second half but the home team raised the pressure and justly drew level when former West Ham United striker Gianluca Scamacca a centering pass.
The winger drove a strong effort straight at the keeper but Atalanta got the winning goal in the closing stages when the Chelsea defenders backed off Charles de Ketelaere, who took full advantage with a driven finish.
The visitors attempted to rescue a point in stoppage time but a brilliant save by the Atalanta goalkeeper denied Pedro.
The final score means Chelsea fall out of the top eight—the positions that progress automatically for the knockouts—to 11th with two league phase fixtures remaining.
Atalanta, meanwhile, leap up to third, three points ahead of the Londoners.
This was a extremely frustrating result for Chelsea as even a draw was keeping them in a strong position to secure the top-eight position they need to avoid the uncertainty of the play-offs.
But they let their concentration slip in their defensive duties with seven minutes left on the clock and their opponents took full advantage.
The Italian side are in rich vein of form at the moment so this was always going to be a challenging examination for the visitors, but they will be disappointed to be leaving with nothing after securing the lead.
But the bigger picture is that this continues Chelsea's worrying sequence of results in all tournaments.
Since defeating Barcelona 3-0 at the end of November they are now winless in their last four outings.
Manager Enzo Enzo Maresca made five alterations for this match as he persisted with his strategy of rotating players in and out of the starting lineup.
The changes here came after he implemented the same number for the defeat to Leeds United and six for the draw with AFC Bournemouth prior to the trip to Atalanta.
The coach will view rotation as essential as he tries to handle players' fitness and challenge both at domestically and abroad, but he maintained the key nucleus of players stays the unchanged for crucial fixtures.
"I think tonight [in] the first XI we had eight or nine players who featured against Tottenham Hotspur, FC Barcelona, and Arsenal," he stated.
"If you look at the five changes that we did compared to the previous game it is a change but it is the eight or nine players who played Barcelona.
"The ones who played this evening are the individuals who feature in almost all the matches."
Chelsea's next Champions League fixture sees them host the Cypriot side on the coming Wednesday (20:00 GMT).
Atalanta, on the other hand, are at home to Athletic Bilbao at the identical kick-off time.
