The Blues looked to gain a first leg advantage against the Spaniards at a sell-out Etihad Stadium.
After surviving some intense early pressure, Erling Haaland gave City the lead on 19 minutes.
That lead lasted until the hour-mark when a mis-hit Kylian Mbappe shot sailed over Ederson and into the net to make it 1-1.
Haaland restored our lead on 80 minutes from the penalty spot, but goals from Brahim Diaz and Jude Bellingham gave the La Liga side a 3-2 win.
Watch all the key moments from pitchside from before, during and after in what was a thrilling battle.
Subscribers to CITY+ can watch the highlights from the game from our immersive Pitcam angle via the video above...
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