Malaysia's Olympics squad shocked by the host goal via Hashem Mohamed Husain Al Alawi in the 26th minute with a strong kick from outside the penalty box to beat goalkeeper Khairul Fahmi Che Mat.
However, Malaysia emerged in the second half to equalize the score with a goal from Hazwan Ahmad Bakri in the 84th minute after receiving a beautiful pass from Zack Haikal Wan Wan Noor.
Jalil Khalil Al Farhan scored the winning goal for the Bahrain team in the 89th minute.
The victory enabled Bahrain to collect six points to maintain third position, while the Malaysia team continued to occupy the bottom of the table without collecting points from four matches.
Malaysia will meet with Japan on Feb 22 before completing the action group against Syria on March 14 at the opposite site.
Earlier, in another match in the same group, Syria overcome Japan, 2-1 at the King Abdullah International Stadium in Amman, Jordan.
Syrian goal scored by Mohamad Ahmad Fares in the 18th minute and Ahmad Al-Salih in the 90th minute while Japan scored a consolation goal by Kensuke Nagai in the 45th minute.
The victory for Syria enable them to seized the lead from Japan by collecting nine points but is distinguished by the total of goals.
