The four-time world champion from Penetanguishene, Ont., allowed 2010 Olympic gold medallist Kevin Martin to score four in the ninth end in a 9-7 come-from-behind victory.
"That's the worse loss of my life, right there," said Howard, 51, who's also won four Briers.
The victory lifted Martin's record to 4-0, keeping the Edmonton skip as one of only two undefeated rinks at the trials, which will determine Canada's men's and women's teams at next year's Olympics in Sochi, Russia. Howard's rink drops to 1-3.
Reigning Canadian champion Brad Jacobs from Sault Ste. Marie, Ont., has also yet to lose a game after he beat Calgary's Kevin Koe 9-4.
Koe is at the bottom of the field with a 0-4 record, while hometown favourite Jeff Stoughton is 1-3 following an 11-5 loss to B.C.'s John Morris (3-1).
Mike McEwen, Manitoba's other men's rink, defeated Toronto's John Epping 10-7. McEwen improved to 2-2 and Epping is 1-3.
"It's just hard out there," Martin said after a game he described as making him feel "spent."
"It's a very emotional day, and games. Every one so far, all four, have just been battles to the last inch."
Just over 7,430 fans at the MTS Centre witnessed Howard's defeat, which the veteran said came at the hands of some unpredictable ice.
That was especially true in the ninth end, when Martin scored the deadly four points to move ahead 8-7.
"(Second) Brent (Laing) missed a peel and then the ice got unbelievably straight in the last two or three ends," Howard explained.
"I threw a real good shot in my last one in nine and for some reason it didn't curl. I have no idea why.
"I was happy with the way I let it go and it ends up being six to eight inches too much ice, which is unreal. Why? Why doesn't it curl there?"
The killer in Koe and Jacobs' game was the eighth end, when Jacobs was sitting four and Koe, the 2010 world champion, had the hammer and missed. The steal of four ended the match.
Competitors have said this week it's doubtful any team will go undefeated, and Jacobs was still believing that.
"Obviously, anybody can beat anyone out there and it's happening," said Jacobs, 28, who got his spot in Winnipeg out of the pre-trials event.
"Everyone sees it, so real tough to go undefeated. I totally agree with that statement. It's virtually impossible, I'd say, but there is a slight chance and right now we're undefeated."
Stoughton was discouraged after his loss, which included a bad fourth end.
He flashed on his first throw and his second hit a Morris rock and then rolled out. That left Jim Cotter a draw to anywhere in the 12-foot for three and a 4-2 lead. Morris is skip, but throws third rocks.
Stoughton looked mad at himself and briefly left the ice.
He also failed to blank an end and then Morris went up 6-3 with a deuce in the sixth.
"We need a lot of help, and that's too bad," said Stoughton, a 2011 world champion who's making his fifth and last try to get to an Olympics.
"We had our fate in our own hands playing John because it would have brought everyone down to two losses and (then) you're basically in a playoff spot."
The women's side also had two teams sharing the top of the standings.
Jennifer Jones and Val Sweeting sit at 3-1, although Sweeting is technically in the lead among the women, thanks to handing Jones her only loss so far.
But at this point, it's what happens next that all 16 teams know matters most in trying to get into the finals, which are Saturday for the women and Sunday for the men.
"It will be the turning point Wednesday, Thursday, obviously," said Heather Nedohin, who handed Sweeting her first loss with a last rock draw to win a tight game 6-5.
"I don't think anyone at the trials ever has done this undefeated," said Sweeting.
"I thought we just got outplayed."
Both teams curl out of the Saville Community Sports Centre in Edmonton.
Nedohin sits in a five-team logjam below the leaders at 2-2 with Renee Sonnenberg alone at 1-3, a spot unlikely to give her a shot at moving on.
"Three losses is going to be tough to make it in," said the skip from Grande Prairie, Alta.
"If we can finish above .500 that's a feather in our hat too."
Jones dominated Sonnenberg from start to finish Tuesday, shaking hands at 7-2 after the eighth. It was a solid comeback after Monday night's 9-6 loss to Sweeting, which included a disastrous four in the seventh end.
"I don't know if we gave it away, we just made too many mistakes so it wasn't our best effort," said Jones.
"I thought we bounced back as well as could have today."
Saskatoon's Stefanie Lawton earned her second win with a 7-5 decision over Winnipeg's Chelsea Carey, and in an all-Ontario game Sherry Middaugh bowed 6-5 to Rachel Homan in an extra end.