Wales won the Triple Crown at Twickenham after substitute Scott Williams scored a stunning breakaway try to thwart battling England.
The World Cup semi-finalists were in deep trouble for much of an enthralling RBS 6 Nations encounter after England marksman Owen Farrell outgunned by rival goalkicker Leigh Halfpenny.
Fly-half Farrell, once again displaying an ice-cool temperament, kicked four penalties to Halfpenny's three before going off injured 15 minutes from time.
But there still threatened to be a final twist when England wing David Strettle went for the line as the game headed into added time.
Wales centre Jonathan Davies tackled him, yet there was a nerve-shredding delay of around four minutes for the visitors before Scottish television match official Iain Ramage ruled that Strettle had not got the ball down.
Toby Flood, on for Farrell, was lined up to attempt a potential match-levelling conversion when referee Steve Walsh relayed Ramage's verdict and blew for full time.
The glory, though, belonged to Williams, whose 50-metre breakaway try came when he robbed England lock Courtney Lawes of possession, sprinted away and then gathered his kick to score, giving Wales only their second Twickenham triumph since 1988.
In many ways, it was rough justice on England after they pushed below-par Wales to the limit, but they lacked a killer instinct.
England could still win the Six Nations, but the ball is now firmly in Wales' court, with the title and Grand Slam theirs if they win home games against Italy and France next month.
Should they seal the deal, it would give them a second Six Nations title and Grand Slam in coach Warren Gatland's four-year reign, but France in Cardiff on 17 March will provide a huge obstacle to overcome.
England's interim coach Stuart Lancaster made four changes for his first home Test in charge, with three players - scrum-half Lee Dickson, lock Geoff Parling and number eight Ben Morgan - handed their full international debuts.
Flanker Sam Warburton returned to captain Wales after recovering from a thigh injury, while hooker Ken Owens and lock Alun-Wyn Jones also featured. Jones had only played 110 minutes of rugby since the World Cup because of a toe problem and subsequent surgery.
Wales started in a hurry, laying siege to England territory with such determination that wing Alex Cuthbert was only denied a try by his opposite number Strettle's tap-tackle.
Wales continued to monopolise possession and, although England proved resilient in defence, it seemed only a matter of time before the visitors smashed through.
But for all their territorial dominance, Wales could not make it count during what proved to be a scoreless opening quarter, emphasised when Halfpenny missed a straightforward penalty chance.
Halfpenny's blunder sparked England into a response, and after Farrell sent a drop-goal attempt wide, he then kicked a resulting penalty that edged the home side ahead.
It was a tense, fraught contest, and even though Halfpenny drew Wales level after 26 minutes, England looked to have weathered a considerable early storm.
Given such defensive heroics, England predictably grew in confidence, with an impressive Farrell not afraid to vary his options, and Wales at times had their hands full on the back foot.
Farrell and Halfpenny exchanged further penalties, but England claimed a 9-6 interval advantage when Farrell completed his penalty hat-trick two minutes before the break.
And it served as a powerful message to Wales, given their superior handling skills, yet they could find no way through an England defence superbly organised by Brad Barritt and his midfield partner Manu Tuilagi.
Wales continued to struggle early in the second period, suffering another case of the yellow peril when fly-half Rhys Priestland was sin-binned after he tackled England prop Alex Corbisiero from an offside position.
Priestland had seen a kick charged down by England lock Mouritz Botha just seconds earlier, and his misery was completed as he trooped off ahead of Farrell kicking a fourth successful penalty.
Wales regrouped to cut the gap by three points with Priestland still off as Halfpenny completed his penalty hat-trick, but approaching the final quarter an intriguing - if limited - game remained in the balance.
Wales should have scored 12 minutes from time, but centre Scott Williams - on at half-time for Jamie Roberts - failed to find an unmarked Halfpenny, and England escaped.
It prompted Wales' strongest spell of pressure since the opening flurries, though, and England had it all to do, defending the lead Farrell had given them.
Halfpenny made it 12-12 with nine minutes remaining, and then came the closing drama, courtesy of Williams and the video referee.