Two first half headers within six minutes from Conor McCarthy and Jon Russell had put the hosts in the driving seat.
Will Dickson deservedly narrowed the deficit just before the break to get us right back in the game.
But despite taking the game to the League One side after the break, Brian Barry-Murphy’s side were unable to find a leveller.
And Emmaisa Nzondo then added a third goal for the Yorkshire side with a looping 79th minute header as we suffered our first loss in this season’s competition.
What happened
With the hosts having made a fine start to the League One campaign and featuring several experienced first team personnel, it promised to be another searching examination for the City youngsters.
Head coach Barry-Murphy had referenced beforehand how it would be a test of the magnitude the majority had never experienced before in their fledgling careers.
It was a Barnsley side high on confidence who carved out the first real opening on seven minutes Hayden Pickard finding Max Watter in space on the edge of the City box only for the Barnsley to send his shot over George Murray-Jones’ goal.
And it needed a fine 15th minute tackle from Kian Noble to deny Fabio Jalo after City had lost possession midway in our half.
Joel Ndala was a positive early attacking outlet for City and fired a 25-yard shot over the bar as we sought to find an opening against a well-drilled Barnsley outfit.
However, it was the hosts who struck first on 26 minutes as they took the lead via a well worked set piece.
Josh Benson whipped on a dangerous corner from the left flank and Barnsley skipper Conor McCarthy rose tallest to head home.
Within six minutes, a tough task suddenly got even harder as the Tykes struck again in almost identical fashion.
This time it was Jon Russell who rose to apply the finish from Hayden Pickard’s well executed corner.
City almost fashioned a timely response as Farid Alpha-Ruprecht weaved his way into the Barnsley before swivelling a firing a shot across the face of goal.
Crucially, Barry-Murphy’s charges did finally make inroads two minutes from the break as Will Dickson struck to halve the deficit.
Ndala was the architect, feeding in an inviting cross from the left after good work by Galvez with Dickson applying the finish from close range.
The second half started at a fast and furious pace with Max Alleyne needing to be alert to deny a goal bound Watters drive.
Some trickery and neat close control from the dangerous Jalo then saw the Barnsley striker poke a drive just wide of the right upright.
City kept pressing too and a fine Jacob Wright was deflected just wide on the hour as we sought to find a leveller.
But the crucial next goal went the way of the hosts – and through another header, substitute Emmaisa Nzondo rising to beat Murray-Jones with a looping effort 11 minutes from time to effectively decide the game.
How we lined up
George Murray-Jones was in goal and shielded by a back four of Tom Galvez, skipper Max Alleyne, Kian Noble and Lakyle Samuel.
Jacob Wright, Kane Taylor, Joel Ndala and Farid Alfa-Ruprecht were in the City engine room with Will Dickson and Jaden Heskey our attacking spearhead.
CITY XI: Murray-Jones, Galvez, Alleyne (c), Noble, Samuel, Wright (Carrington 80), Taylor, Heskey (Warhurst 89), Ndala (Oboavwoduo 61), Alfa-Ruprecht (Lawrence 61), Dickson (Adama 83)
Subs: Grant, Okeke
BARNSLEY: Killip, Russell, De Gevigney, Benson (Bland 69), Jalo, McCarthy, Benson, Watters, Chapman, Shepherd (James 45), Pickard
Subs: Flavell, Benjamin, Yoganathan, Nzondo, Dyer
What it means
City’s hope of finishing in the top two in Group F are still alive but could well now hinge on our last group game away at Bradford in late October depending on how the Bantams fare beforehand.
Barnsley lead the way with six points, we are second with two points from two games, Grimsby have one from two while Bradford are still to play a game.
What’s next
The City Under-21s are back in action on Saturday when we resume Premier League 2 action at home to West Ham United.
Kick-off at the Joie Stadium is slated for 13.00pm (UK).
We then resume UEFA Youth League action next Wednesday away to RB Leipzig.
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