SUB Sherjill MacDonald's superb second-half strike was not enough to save Albion from defeat in their opening pre-season friendly against the Bundesliga Two champions.
The Dutch Under-21 international cancelled out Roberto Colautti's opener on the stroke of half-time when he fired home from 20 yards in the 64th minute.
But the Baggies were only level for a further nine minutes after Borussia sub Moses Lamidi beat the impressive Dean Kiely from 15 yards.
Tony Mowbray gave all 20 of his outfield players a run-out in this competitive friendly at the neutral German venue of Goch.
Ishmael Miller caught the eye with a bustling first-half display but key midfielder Robert Koren gave the Baggies boss cause for concern by limping off in the 59th minute.
Mowbray started with new permanent signing Luke Moore and Miller in attack as Marek Cech, yesterday's £1.4million recruit from Porto, watched from the stands.
Both teams had to contend with the Hubert Houben Stadium's bobbly pitch, with several Baggies players losing their footing during the opening exchanges.
The German side were the first to threaten in the tenth minute when right-back Steve Gohouri cut inside from the flank and blasted just wide of the near post.
Albion showed plenty of promise going forward during the opening 20 minutes but kept losing their way on the edge of the Borussia box.
Miller bucked that trend on 23.
The powerhouse striker neatly controlled Chris Brunt's pinpoint crossfield pass before breezing past centre-half Roel Brouwers and firing just wide from 20 yards.
However, the Albion goal lived a charmed life in the 25th minute.
Kiely did well to palm away Marko Marin's snapshot from Marcel Ndjeng's pull-back.
The rebound fell perfectly for the unmarked Colautti at the back post who looked certain to score before Kiely came from nowhere to turn the ball wide from point-blank range.
From the ensuing corner, Karim Matmour saw a 20-yard effort blocked by skipper Jonathan Greening in the box.
Again the loose ball fell invitingly for Colautti, only for the Monchengladbach striker to drag his shot inches wide of the far post.
At the other end, Miller was proving a real handful and created Albion's next chance when he again surged past Brouwers to reach the byline and cross.
Keeper Christopher Heimeroth leapt off his line to palm the ball off the unmarked Moore's head and Brunt's 15-yard follow-up shot was blocked by a Borussia defender.
The ball again broke to an Albion man but Carl Hoefkens blazed over from the edge of the box.
Back came Jos Luhukay's side and, in the 34th minute, the lively Ndjeng clipped the top of the bar with a fierce dipping drive from 25 yards.
Hoefkens' tenacity paid off when Jan Sebastian Jaures and Marin got in a horrible tangle near the Borussia byline, allowing the Belgian international to cross.
The off-balance Miller did well to direct a cheeky backheel goalwards from six yards, only for Heimeroth to save low to his right.
But Borussia finished the half strongly and snatched the lead with the final kick.
Skipper Patrick Pauuwe's deflected 20-yard drive threw the Baggies rearguard off balance.
The ball broke to the alert Colautti who burst past Hoefkens and Kiely across the edge of the six-yard box before slotting home.
Mowbray rang five changes at half-time as Greening, James Morrison, Brunt, Miller and Moore made way for Do-heon Kim, David Worrall, MacDonald, Craig Beattie and Roman Bednar.
And, while his new-look side were settling into their stride, Sascha Rosler ghosted in behind the Baggies backline to wastefully head fellow sub Johannes Van d. Berg's centre over.
The Albion manager was forced into another change in the 59th minute when debutant Graham Dorrans came on for the injured Koren.
But what had now become a relatively inexperienced Albion side almost levelled in the 63rd minute.
Paul Robinson managed to sneak in at the back post to stab Kim's free-kick just over on the half-volley.
But Mowbray's men only had to wait another minute to level.
Hoefkens' right-wing cross was neatly headed by Worrall back into the path of fellow sub MacDonald who slammed the ball into the bottom right-hand corner from 20 yards - to delight the 200-odd travelling Albion fans.
Kiely had enjoyed a quiet second half so far but pulled off a fine one-handed save in the 72nd minute to turn Rosler's 20-yard curler out for a corner.
At this stage, Albion's back four was unrecognisable, with teenage midfielder Worrall at right-back, Jared Hodgkiss partnering Pele in central defence and Tininho operating at left back.
And, just 60 seconds later, Lamidi raced onto fellow sub Sharbel Touma's fine diagonal ball from the left before slamming it past the helpless Kiely.
Bednar came closest to clawing Albion level a second time when he flashed a header just over from Dorrans' corner in the closing stages.
MONCHENGLADBACH (4-4-2): Heimeroth; Gohouri, Kleine, Brouwers, Jaures; Ndjeng, Albermann, Paauwe, Marin; Matmour, Colautti. Subs: Baumjohann, Callsen-Bracker, Daems, Gospodarek, Lamidi, Levels, Rosler, Schachten, Svard, Touma, Voigt, Coulibaly, Friend, Lohe, Neuville, Van d. Berg.
ALBION (4-4-2): Kiely; Hoefkens (Slusarski 67), Barnett (Hodgkiss 67), Clement (Pele 67), Robinson (Tininho 67); Morrison (Worrall HT), Greening (Kim HT), Koren (Dorrans 59), Brunt (MacDonald HT); Miller (Beattie HT), Moore (Bednar HT). Subs not used: Danek (gk), Daniels (gk).
GOALS: MONCHENGLADBACH - Colautti (45), Lamidi (73). ALBION - MacDonald (64).
REFEREE: C Bandurski (Essen).
ALBION STARMAN: Ishmael Miller.
PIC: ON THE MARK...Scorer MacDonald powers forward against Borussia
