City also became the owners of another dubious English record by having the worst performance ever by an EPL club in the group stage of the Champions League.
City were dominated for most of the match and failed to pose a threat to the Dortmund defense throughout the entire match.
Here are the ratings for every City player that took to the pitch on Tuesday night in Dortmund.
Goalkeeper: Joe Hart
Hart was one of the few bright spots in Roberto Mancini's starting 11 on Tuesday night.
The only flaw during Hart's performance on Tuesday came in the 57th minute when he let in the Dortmund goal, scored by Julian Schieber, but the goal was not his fault.
Poor defending caused the goal, and Hart could not do anything in his power as the ball passed by his outstretched arms and into the back of the net.
As for the rest of his night, Hart made six saves with four of the six stops made in the second half when Dortmund were constantly on the attack.
Defenders: Maicon, Vincent Kompany, Joleon Lescott, Matija Nastasic
Grades: Maicon: 6, Kompany: 5.5, Lescott: 5.5, Nastasic: 6.5
The City back four were given too much to handle on Tuesday night by the Dortmund attack.
The most striking slip-up in the City back four came on the Dortmund goal when Jakub Blaszczykowski slotted a pass between Kompany and Lescott to the feet of the goal scorer, Schieber.
Maicon's presence in the attack was muted as his runs forward were thwarted by the stellar back four that Dortmund possess.
Nastasic was forced to shift out to left-back due to injuries to both Gael Clichy and Aleksandar Kolarov.
The Serbian defender did not make any critical errors in defense and did look strong early on in the match by linking up with Scott Sinclair on the left wing, but he fell quiet in the attack after Dortmund scored their goal.
Midfielders: Samir Nasri, Javi Garcia, Gareth Barry, Scott Sinclair
Grades: Nasri: 6, Garcia: 6.5, Barry: 6, Sinclair: 5.5
The Manchester City midfield missed the presence of the suspended Yaya Toure in both the defensive and attacking aspects of the match.
Garcia was the recipient of an undeserved yellow card in the 29th minute after his tackle on Ivan Perisic.
Garcia did not go to ground in the process of tackling the Dortmund midfielder and had every right to complain to the referee about his booking.
Once again, Nasri turned in an uninspiring performance on the right wing before being taken off in the 69th minute for Pablo Zabaleta.
Who Was City's Best Player on Tuesday?
Sinclair was a surprise start in the midfield and after some good play with Nastasic on the left wing in the first half, he also did not see much of the ball in the second half.
The former Swansea player did not have much time to impress in the second half as he was substituted in the 57th minute.
Barry played a solid match alongside Garcia in the middle of midfield but did nothing to either impress or disappoint City fans on Tuesday.
Forwards: Edin Dzeko, Carlos Tevez
Grades: Dzeko: 7.5, Tevez: 8
Say what you want about the lack of quality in the defense and in the midfield on Tuesday, but there is no way City fans can criticize the effort of their forward partnership against Dortmund.
Dzeko finally came to life in the starting role and took four shots on goal, including a header he put on target in the 46th minute.
The Bosnian finally showed City fans and Mancini that he should keep his spot in the starting lineup for now.
Tevez was City's best player on the pitch at the Westfalenstadion on Tuesday night as he tried countless times to get the City attack going in the right direction.
While the Argentinian did not have as many shots on goal as Dzeko during the match, he was a provider for most of the Bosnian's chances.
Tevez' play improved even more when Sergio Aguero was brought on in the 57th minute.
The Argentinian duo combined for their best chance in the 67th minute when Tevez got a shot on goal after receiving a pass from Aguero.
Substitutes: Aguero, Mario Balotelli, Zabaleta
Grades: Aguero: 6.5, Balotelli: 5.5, Zabaleta: 6
Aguero was the first substitute to come on to the pitch in the 57th minute for Sinclair, and he was the best performer out of the three substitutes that Mancini used on Tuesday.
Aguero combined well with Tevez as the two combined well on chances for City for the first 15 minutes that Aguero was on the pitch.
Balotelli was a waste of a substitution against Dortmund, but Mancini had no other choice but to use the Italian after going down a goal.
Balotelli came on in the 65th minute for Dzeko to plenty of boos from the Dortmund crowd.
The controversial Italian gave the Dortmund crowd something to cheer about late in the match as he earned a yellow card in stoppage time.
Zabaleta was the final substitute brought into the match by Mancini in the 69th minute, and he had very little impact on the outcome of the match.
The move to bring on Zabaleta for Nasri was one to conserve Nasri for the Manchester derby on Sunday.
Manchester City will now be able to focus the rest of their 2012-13 campaign on repeating as EPL champions.
City will look to rebound from their disappointment in Europe with a win over rivals Manchester United on Sunday at the Etihad Stadium.
How would you rate the performance of City's players on Tuesday?
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