The Jaguares retained their unbeaten run at home with a 22-8 win over the Reds in a scrappy match in Buenos Aires on Saturday.
Despite a strong start, which saw the South American franchise take a 22-3 lead on the 50-minute mark, the Reds got back into the game and dominated the last half-hour.
However, the visitors managed a solitary try in their period of dominance - having the upperhand both in terms of possession and territory.
Their high error rate also stopped the Reds from closing down the Jaguares' substantial lead.
Ramiro Moyano scored a superb try, wing side-stepping numerous opponents in a dazzling run from midfield before accelerating to the line at Estadio Jose Amalfitani in Buenos Aires.
His try was the highlight of a bruising and often dour battle.
The Argentine outfit have won four of five matches this season - a huge improvement on four victories and 11 losses last year when they debuted in the competition.
Wing Eto Nabuli and lock Kane Douglas were sin-binned within 60 seconds during the opening half, leaving the Reds to play nine minutes with 13 men.
Jaguares wing Bautista Ezcurra was yellow-carded midway through the second half with his side clinging to a 14-point advantage.
The South Americans lie second in a tight Africa Two table, one point behind 2016 runners-up Lions and one ahead of another South African franchise, the Sharks.
After winning their first match this season, the Brisbane-based Reds have lost four in a row with a two-match tour of South Africa and Argentina yielding no points.
"We expected a tough match and got one," Reds and Wallabies skipper and hooker Stephen Moore told reporters.
"Losing four matches in a row is obviously disappointing and we need to get home and sort things out.
"We had a number of young players in our matchday 23 and I hope they have gained from the experience of playing in Argentina."
Reds made seven changes from the starting line-up that lost at the Lions last weekend with injured skipper and prop James Slipper and suspended flyhalf Quade Cooper among those missing.
It does not get any easier for the Australians next weekend as they host the defending champions, Hurricanes of New Zealand.
The Argentines built a 12-point advantage through two tries, one of which flyhalf Juan Martin Hernández converted, before he and Jake McIntyre slotted penalties and the hosts led 15-3 at half-time.
Centre Jeronimo de la Fuente scored his second try of the match, which Hernández converted, to stretch the advantage to 19 points before Reds No.8 Scott Higginbotham dived over in the corner.
The Jaguares have a bye next weekend.
Man of the match: Karmichael Hunt, Samu Kerevi and Eto Nabuli had some decent runs, while Kane Douglas was the Reds' most productive forward. Jeronimo de la Fuente scored the tries and Juan Martin Hernández kicked brilliantly, but the puppet master that pulled the strings was Jaguares scrumhalf Gonzalo Bertranou. He is our man of the match.
For the Jaguares:
Tries: De la Fuente 2, Moyano
Cons: Hernández 2
For the Reds:
Yellow cards: Eto Nabuli (Reds, 18 - cynical foul, deliberately slapping the ball down), Kane Douglas (Reds, 19 - cynical foul, illegally collapsing a maul near the tryline), Bautista Ezcurra (Jaguares, 62 - cynical foul, deliberately slapping the ball down)
Jaguares: 15 Joaquín Tuculet, 14 Ramiro Moyano, 13 Matías Orlando, 12 Jerónimo de la Fuente, 11 Bautista Ezcurra, 10 Juan Martín Hernández, 9 Gonzalo Bertranou, 8 Leonardo Senatore, 7 Tomás Lezana, 6 Pablo Matera, 5 Matías Alemanno, 4 Marcos Kremer, 3 Felipe Arregui, 2 Agustín Creevy (captain), 1 Lucas Noguera Paz.
Replacements: 16 Roberto Tejerizo, 17 Santiago García Botta, 18 Ramiro Herrera, 19 Guido Petti, 20 Javier Ortega Desio, 21 Felipe Ezcurra, 22 Nicolás Sánchez, 23 Emiliano Boffelli.
Reds: 15 Karmichael Hunt, 14 Izaia Perese, 13 Samu Kerevi, 12 Duncan Paia'aua, 11 Eto Nabuli, 10 Jake McIntyre, 9 James Tuttle, 8 Scott Higginbotham, 7 Adam Korczyk, 6 Leroy Houston, 5 Kane Douglas, 4 Izack Rodda, 3 Sam Talakai, 2 Stephen Moore (captain), 1 Markus Vanzati.
Replacements: 16 Andrew Ready, 17 Kirwan Sanday, 18 Taniela Tupou, 19 Lukhan Tui, 20 Hendrik Tui, 21 Nick Frisby, 22 Lachie Maranta, 23 Chris Kuridrani.
Referee: Mike Fraser (New Zealand)
Assistant referees: Jamie Nutbrown (New Zealand), Damian Schneider (Argentina)
TMO: Santiago Borsani (Argentina)
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