The Barcelona forward headed in from Eugenio Mena's cross after seven minutes at Wembley Stadium and lifted the ball over goalkeeper Fraser Forster in stoppage time after England was ripped apart.
"Sanchez has got everything it takes to be a real star of the World Cup tournament," Chile coach Jorge Sampaoli said through a translator. "He's in a really good vein of form and showed his class tonight."
By Sanchez taking his international tally to 22 goals in 63 games, Chile was able to replicate its 1998 victory at the old Wembley.
"It's one of those events that will go down in history — when you come to the cathedral of football and win," Sampaoli said. "It's great to make the Chilean people happy ... and what is does show is that we can compete against teams on an equal footing."
With a vibrant display in chilly London, the visitors delivered a reality check to England as it prepares for the World Cup in Brazil next year, inflicting the hosts' first loss of 2013.
On a night when three players made their England debuts, Roy Hodgson's side forced goalkeeper Claudio Bravo into making a string of fine saves but lacked fluency.
England rounds off the year against Germany on Tuesday when Chile faces Brazil in Toronto.
"We learned a lot about our squad players and a lot about what it will be like to play against South American opposition," England coach Roy Hodgson said. "I think that was the best display of passing from a goalkeeper (Bravo) I have ever seen."
This was one of three games England has until Hodgson has to name his World Cup squad, and he used it to experiment.
In goal Joe Hart made way for Celtic goalkeeper Fraser Forster, and there were also debuts for Southampton duo Jay Rodriguez and Adam Lallana.
It was a bright opening, with Lallana whipping in a free kick after three minutes that Phil Jones got on the end of with a header that Bravo tipped over.
But at the back England was shaky and conceded after just seven minutes.
Eugenio Mena's cross went over Gary Cahill and Sanchez pushed himself ahead of Leighton Baines and headed past Forster.
The goalkeeper, who is being tested as Hart was rested, had to be at full stretch to deny Jean Beausejour.
At the other end, Bravo's athleticism was required to first push over Frank Lampard's dipping free kick with a one-handed save and then keep out Jack Wilshere's powerful shot.
The first half petered out with Rodriguez's tame shot easily collected by Bravo.
In a second half when both teams made a string of substitutions, there was little goal threat until the fourth minute of stoppage time as Chile was gifted a second.
Cahill gave the ball away around the halfway line and Jose Fuenzalida played the ball through for Sanchez to chip Forster.
And when the whistle blew, England's players were booed by their own fans.
"We have got a long way to go," Lampard said. "We need to concentrate on what we are doing, we have got another game against top class opposition (Germany) on Tuesday and we need to improve."