West Ham striker Arnautovic netted in the second half in Vienna to give Austria their first win in the new competition
Marko Arnautovic fired Austria to a 1-0 win over Northern Ireland as the visitors crashed to a second successive defeat in the Nations League.
West Ham striker Arnautovic netted in the second half in Vienna to give Austria their first win in the new competition.
Success in the Nations League could secure a place at Euro 2020, but Northern Ireland are a long way from that target, sitting bottom of a three-team group that also includes Bosnia.
They now need to win Monday's match against Bosnia in Sarajevo to remain in the hunt for first place.
Michael O'Neill's side were toothless without Rangers striker Kyle Lafferty, who started the loss against Bosnia last month but pulled out of the squad at short notice, claiming an injury before the Austria match.
"Marko Arnautovic has that quality and it is a good finish. We have played better but I thought the referee didn't do us any favours to be honest," O'Neill said.
"Maybe I am a little biased but in the first half we didn't seem to get anything.
"The challenges tended to drop on the side of the home team. I did feel like it disrupted things a little bit."
Northern Ireland were under pressure early on when goalkeeper Bailey Peacock-Farrell picked up Jonny Evans' back-pass in his area to gift Austria an indirect free-kick.
Arnautovic fired straight into the wall, but the initial error was indicative of Northern Ireland's sloppy performance.
Northern Ireland had a rare sight of goal when Ollie Norwood found the run of Millwall winger Shane Ferguson, but he headed high and wide.
Peacock-Farrell denied Arnautovic and Marcel Sabitzer in quick succession, while Steven Davis wasted Northern Ireland's best chance when he dragged a shot wide after surging clear.
Arnautovic wanted a penalty in the 65th minute when he tried to cut in past Jamal Lewis, but the referee showed no interest.
He wasn't left to rue that decision however as Austria took the lead in the 71st minute.
Beating Northern Ireland's offside trap with a well-timed run, Arnautovic collected Peter Zulj's pass and slotted past Peacock-Farrell.
O'Neill sent on Kyle Vassell for his Northern Ireland debut and also introduced Will Grigg in the closing stages.
Grigg came close to salvaging a point in the 84th minute when he met McNair's corner with a header that bounced off the far post.