At a glance
Rampant Hearts powered eight points clear of their Glasgow rivals at the top of the Scottish Premiership to strengthen their early title credentials and worsen the struggles around the Celtic team.
Alexandros Kyziridis' fine strike and a spot-kick from Shankland gave Derek McInnes' side a two-goal advantage that the title holders could not overcome.
The young defender - one of three youngsters in the Celtic starting lineup - scored an own goal early on to put Hearts ahead at a energetic Tynecastle, and it was the 22-year-old's foul that led to the penalty.
Callum McGregor's classy first goal of the season had swiftly equalized Hearts' opener, and the Swedish attacker almost put Rodgers' team in front, opting for finesse over power and allowing Alexander Schwolow to make a crucial stop.
But Derek McInnes' irrepressible Hearts seized control again to hand the visitors to back-to-back losses for the initial occasion since 2023.
It also gives the Edinburgh side a commanding advantage at the summit.
The last time they were so far clear was in 2005-06 under their former manager, when they ended as runners-up - a rare instance that a team has failed to win the title after building such an advantage in the last three decades.
The Hearts coach, whose Aberdeen side were runners-up to the champions on multiple times, has been working hard to play down championship discussions, as Hearts seek their first top-flight crown since the 1960s.
Rodgers has experienced this previously at the club - both perfect and shaky beginnings to a season. He's never ended as runner-up.
But on Sunday's evidence, this Hearts team showed they deserve serious consideration.
The Edinburgh side started with the self-assurance of a side unbeaten in the league this season - the popular attacker poked a cross in for the striker to stab wide.
Celtic didn't aid their cause with some uncharacteristic carelessness in possession and they buckled under their first real examination.
Claudio Braga's header was touched on to a post by Kasper Schmeichel and the follow-up from Shankland was turned into the net by the hapless defender, in for the injured Cameron Carter-Vickers.
Celtic found their rhythm and started stringing passes together. From one such move, the midfielder released the full-back to square for McGregor, who rolled in.
Aside from the Nygren chance, the visitors found it hard to generate chances for striker Kenny or his substitute Yamada amid the unavailability of injured forwards their key strikers.
The home team regained their intensity and adaptability in attacking from across the final third. The Greek forward, a standout performer of the club's scouting network, struck low past Schmeichel from the edge of the box.
Almost straight away, Murray tripped the midfielder in the right side of the box and the penalty taker scored. And it could've been an more comprehensive victory, had replacement Ageu not been stopped by Schmeichel.
Celtic's second half was somewhat summed up in a couple of moments involving big-money recruit Engles.
The set-piece from Engles delivery was in sharp opposition to his midweek exploits in the continental victory over Sturm Graz and the Belgium international was then booked for a cynical foul.
The Hearts manager: "The effort from the squad is evident, the togetherness. That's not sufficient on its own to win games consistently.
"Our strength lies in, is good technical ability. You're seeing that from a lot of players who have been here before. Recent additions are keen to demonstrate their quality.
"We've got a good thing going at the minute, but it's only three points. It's important for us to maintain this form. We've got loads to do, loads to do. After the first two rounds is normally an indication of your standing."
The Celtic boss: "It's a really poor goal from our perspective. We failed to push up when the play was recycled as a defensive unit so when they pass the ball, they ought to be caught offside but didn't. We have got to improve with the attempt.
"Plenty of matches to play for. It's only the beginning. It's just nine matches. Clearly, being eight points behind is not what we would want. The comfort is there's numerous fixtures to play.
"We now have to focus on the present and look to find more consistency and more quality in our play."
The Glasgow club are back at home on Wednesday against newly-promoted Falkirk (19:45 GMT). At the identical hour in the Scottish Premiership, the Edinburgh outfit are at their opponents' ground.
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