Their second meeting against the Valencian side in a week was decided by Jose Luis Morales’ 30th-minute deflected strike and Jorge de Frutos’ stoppage-time effort.
Atletico, who created 28 efforts on goal, were thwarted by goalkeeper Dani Cardenas on several occasions.
Third place Barcelona, nine points adrift of Atletico, play Cadiz on Sunday at 13:00 GMT.
Levante’s 23-year-old keeper was in superb form, notably stopping Joao Felix’s strike from point-blank range before blocking a thumping half-volley from the Portuguese forward. He also scrambled across his goal to keep out a late low drive from Renan Lodi.
When Cardenas was beaten the post saved him, with Luis Suarez’s brilliant 30-yard free-kick thundering off the woodwork.
Levante were a threat during counter-attacks, especially in the first-half. Morales had missed a golden chance before he converted his second with a low strike that came off the leg of defender Felipe.
With seconds remaining, Levante scored their second. Atletico keeper Jan Oblak joined his team-mates for a corner, but was stranded when the visitors broke away with De Frutos finding the empty goal with a superb finish.
This was Levante’s first win at Atletico in the league, and it was also the first home league defeat for Diego Simeone’s side since December 2019.