Villarreal took the lead from the penalty spot when Juan Riquelme converted after a handball by Dado Prso. Peter Lovenkrands equalised with a superb shot from 20 yards before Diego Forlan, from a suspiciously offside position, put the visitors ahead again.
The Spanish side should have added to their lead but some good saves by Ronald Waterreus and some poor finishing restricted their advantage to one goal at half time.
The second half was a much tamer affair but a late own goal by Juan Manuel Pena gave the Ibrox side some hope for the return match.
It was a shocking mistake by Prso as he blatantly handled Riquelme's corner which gifted Villarreal the lead.
Hamed Namouchi shot narrowly wide before Forlan was judged to be offside as he scored after a superb save by Waterreus from Gonzalo Javier Rodriguez.
Rangers equalised when Lovenkrands curled home an exquisite shot when the ball fell to him after Chris Burke's superb run.
Riquelme was controlling the midfield with his astute passing and movement and Forlan had another goal disallowed before the striker finally scored one that counted.
Riquelme headed the ball back into the box and, although Waterreus did well to block Gonzalo's shot, Forlan curled the ball home although he appeared well offside.
In the second half, the visitors looked happy to retain possession rather than add to their lead. However, the paid the penalty when a late own goal by Pena, when he stabbed home substitute Thomas Buffel's cross, levelled the scores.
But it still looks an uphill task for the Scottish team.