Defeat leaves Real already seven points adrift of leaders Barcelona just five games into their defence of La Liga having failed to win in all three home games so far this season.
Even the presence of Cristiano Ronaldo on his return from a five-match domestic ban couldn't break Betis' resistance as former Real goalkeeper Antonio Adan produced stunning saves from Isco, Toni Kroos and Gareth Bale.
And Betis snatched all three points in the 93rd minute when Sanabria powered home a header from Antonio Barragan's cross.
"Last year we won games we didn't deserve to and now it is the reverse," said Real coach Zinedine Zidane.
"The league is very long, in the end we'll see how it goes but we need to be calm and we know we will have better days."
It is the first time Betis have won at the Bernabeu since 1998.
"It is impossible to win here without suffering," said Betis boss Quique Setien.
"To win against a team like this, your goalie has to have a spectacular game and you have to have luck."
Ronaldo was recalled among three changes to the Madrid side from Sunday's 3-1 win at Real Sociedad as Zinedine Zidane named his strongest available side.
However, it was the visitors who made the stronger start and should have gone in front when Sanabria's goalbound effort was cleared off the line by Dani Carvajal.
Keylor Navas also produced a stunning save to tip Fabian Ruiz's rising drive over the bar.
At the other end, Adan made a smart stop to deny Isco just before half-time and Betis had to resist an onslaught after the break.
Ronaldo blazed wildly over from Bale's inch-perfect cross before Kroos forced Adan into another finger-tip stop.
The former Madrid 'keeper's finest moment came in denying Bale in spectacular fashion 15 minutes from time, though, as the Welshman's backheeled volley was turned onto the post.
Betis were the side to finally have the ball in the net as the game entered five minutes of stoppage time, but Sanabria had strayed offside as he turned home Andres Guardado's shot.
However, they broke with purpose once more minutes later and this time Sarabia wasn't to be denied as he bulleted a header into the far corner from Antonio Barragan's cross. Receive Instant News Update Via BBM: D3EDEFDF...Click HERE for Details. Share your story with us: email@example.com PLACE YOUR TEXT ADVERT BELOW:>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> How I TOTALLY Got Rid Of my POT BELLY,excess Fat and Overweight In just 2weeks.. Click HERE for Details. Warning To Men: This 3 Foods Is Killing Your Erection. Click Here To Know Them