Karim Benzema and Casemiro scored a goal each in the dying embers to cancel out Marcus Thuram's brace and earn a valuable point for Los Blancos.
Despite the morale-boosting Clasico victory at the weekend, this was another average performance from Zinedine Zidane's side, who were ruthlessly exposed on the break by the Foals.
They were behind for a vast majority of the game but managed to produce a late comeback to save face. Yet, the result leaves them at the bottom of the group.
Real Madrid next face a daunting double-header against Serie A giants Inter Milan.
Here are the ratings for Real Madrid players:
Real Madrid player ratings
Thibaut Courtois - 7/10
Thibaut Courtois recovered well after conceding twice, making some crucial stops while also superbly denying Alassane Plea in a one-on-one situation.
Lucas Vazquez - 6.5/10
Replacing the injured Nacho at the right-back spot, Lucas Vazquez appeared lively in the first half, setting up Karim Benzema early on with a nice chipped cross before going at goal himself. However, the Spaniard couldn't keep up the momentum and drifted off in the second half.
Raphael Varane - 6.5/10
Aside from a few interceptions, Raphael Varane didn't do much. His passes were great but that's pretty much it.
Sergio Ramos - 7.5/10
Sergio Ramos was at his best once again, leading his team from the back. He laid the most passes, won the most aerial duels and also assisted Casemiro for the last-minute equaliser by heading the ball straight into his path.
Ferland Mendy - 8/10
Ferland Mendy was superb at both ends for Real Madrid. He kept Jonas Hoffman in check by closely marking him at all times and also linked up with Vinicius by feeding his overlapping runs. However, it was Mendy who played Thurram onside for the second goal.
Federico Valverde - 7/10
Federico Valverde might have covered every blade of grass at the Borussia-Park; such was his work-rate. And it was his cross that Casemiro latched on to before setting up Benzema.
Casemiro - 8/10
Casemiro made his presence felt at both ends of the pitch. For much of the game, he helped out in the defence, dispossessing Gladbach players with high-press and making some crucial last-minute blocks. Towards the end of the match, the Brazilian got heavily involved in the attack and was at the heart of both the late goals, creating one and scoring the other.
Toni Kroos - 7.5/10
Toni Kroos was the distributor-in-chief for Real Madrid, floating crosses in the middle and on the flanks, while also drawing out a good save from Sommer near the far post.
Marco Asensio - 7/10
The best player of the front-three, Marco Asensio tested Sommer on more occasions than any Real Madrid player. He attempted five shots, the most on the night, with one of his efforts even hitting the crossbar.
Vinicius Junior - 6.5/10
After disappointing in the Clasico at the weekend, Vinicius had another stinker. His crosses left a lot to be desired while he was also dispossessed several times. He was substituted in the 70th minute.
Karim Benzema - 7/10
Karim Benzema was having a quiet night, rarely threatening Yannick Sommer, but turned up at the right place at the right time to spark Real Madrid's comeback, executing a wonderful overhead kick in the 87th minute.
Luka Modric - 7/10
Luka Modric replaced Kroos in the 70th minute and brought an added spark to the Real Madrid midfield by dropping a number of crosses into the box down the left, one of which even found Ramos to create Casemiro's winner.
Eden Hazard - 7/10
Back in the Real Madrid team after a long time, Eden Hazard instantly made a difference, working his way around Gladbach's defence with neat passes and dribbles.
Rodrygo - N/A
The Brazilian was only called on in the 84th minute for Asensio but didn't see much of the ball to have an impact in the match.