The modest Valencia-based club, who are through to face Greek side Olympiakos Piraeus in the last 32 of the Europa League on their debut in continental competition, fell behind to a fine Javier Baraja volley in the eighth minute.
However, Jose Javier Barkero curled in a superb free kick a minute before halftime and Valladolid defender Antonio Rukavina sliced the ball into his own net in the 90th minute to hand victory to the home side.
With just over half the season played, Levante have 33 points, one ahead of Malaga, who play at Real Mallorca on Sunday (2000 GMT). Valladolid are 10th on 28 points.
Leaders Barcelona are looking to get back to winning ways when they host struggling Osasuna on Sunday (1800).
Tito Vilanova's side lost their unbeaten record and dropped points for only the second time this season when they suffered a 3-2 reverse at Real Sociedad last weekend but still have an eight-point lead over second-placed Atletico Madrid.
Atletico will be missing injured top scorer Radamel Falcao when they play at Athletic Bilbao on Sunday (2000), while Real Madrid, seven points behind their city rivals in third, host Getafe (1100) without goalkeeper Iker Casillas, who fractured a bone in his hand in Wednesday's King's Cup game at Valencia.
Captain Casillas may be sidelined for up to three months and Real have brought in former Spain keeper Diego Lopez from Sevilla as cover.
San Sebastian-based Sociedad failed to build on their impressive win against Barca and were held to a 1-1 draw at Celta Vigo in Saturday's earlier kickoff. The Basque club are eighth on 30 points and Celta are 16th on 20.
Valencia, handed a humiliating 5-0 La Liga drubbing by Real last weekend and knocked out of the Cup by the Madrid side on Wednesday, play at bottom side Deportivo La Coruna in Saturday's late kickoff (2100).