Spanish Primera Liga side beat 10-man Portuguese rivals 2-0 and are through to the quarter-finals on 2-1 aggregate.
Malaga's Uefa Champions League win over Porto does coach Manuel Pellegrini proud
Malaga's European run continued into the quarter-finals of the Uefa Champions League after Manuel Pellegrini's men overcame a one goal first leg deficit to beat 10-man Porto at La Rosaleda.
Isco's wonderful opener minutes before the break gave the home side the lead to cancel out Joao Moutinho's first leg goal before substitute Roque Santa Cruz scored just four minutes after coming on to seal a famous win.
With a four-year European ban hanging over them, this year's competition is all the more important for the Spaniards, who ramped up the pressure after Steven Defour saw red four minutes into the second half.
After a slow start, Julio Baptista headed tamely over from an Isco free-kick in the 11th minute, as the home side made strides to make up their one-goal deficit from the first leg.
The first 30 minutes were dominated by bookings with neither side holding back, putting in some strong challenges.
Porto's Nicolas Otamendi was the first to see yellow after 17 minutes, before Martin Demichelis, Defour, Alex Sandro and Jesus Gamez all joined him in the book.
Porto were playing their own dangerous game, holding a high line against a pacy Malaga forward line.
They were lucky the linesman raised his flag in the 27th minute against Javier Saviola after he was sent clear by Defour.
Joaquin shot over just after the half hour mark before Vitorino Antunes forced a decent save out of Porto stopper Helton, who acrobatically tipped his effort over the bar.
Saviola then had a goal ruled out by referee Nicola Rizzoli after Baptista was alleged to have fouled Helton, before he spilt the ball to the striker. However replays showed that the Brazilian was pushed into the keeper by Danilo.
Malaga finally got their goal their pressure deserved three minutes before the break. And it was worth the wait.
With few options and nobody closing him down Isco curled a wonderful effort over Helton and into the top corner to put his side level on aggregate.
James Rodriguez replaced Joao Moutinho at the break as the visitors sought to improve their attacking options.
However just four minutes into the second period they were in trouble after Defour received a second yellow for a petulant trip on Joaquin, whose skill and speed had see him glide past the Belgian.
Vítor Pereira reacted by bringing on Maicon for winger Silvestre Varela and switching to three centre-backs, before Jeremy Toulalan was booked for a lunge on Lucho Gonzalez.
Christian Atsu came on for Sandro with 20 minutes left before Santa Cruz replaced Baptista.
Jackson Martinez's flick almost swung the game the other direction, but his header drifted just wide.
And just after coming on Santa Cruz put his side ahead after outjumping Otamendi from an Isco corner to plant his header past a diving Helton.
Maicon thought he had put Porto back in front after heading home from a free-kick, however the goal was correctly ruled out for offside as Malaga progressed.
Malaga coach Pellegrini praised his players for keeping their focus through a turbulent period for the Qatari-owned club.
Malaga's long-suffering fans have endured a roller-coaster ride since Sheikh Abdullah Al Thani, a member of the Qatar royal family, bought the Costa del Sol club in 2010 after they narrowly avoided relegation.
Hefty investment in players and the hiring of former Real Madrid and Villarreal coach Pellegrini yielded a top-four finish last term and a place in Europe's elite club competition.
However, things apparently began to unravel over the summer and while rumours Al Thani was looking to bail out went unanswered top players like Santi Cazorla were sold off to raise cash.
There appeared to be a power vacuum, with local officials keeping the club running as much in the dark as players, coaching staff, fans and journalists.
Al Thani's lieutenant eventually announced Malaga were undergoing an "internal restructuring" to bring them into line with Uefa's Financial Fair Play rules.
Outstanding debts to players, staff and other clubs began to be settled and a measure of calm returned.
The season began in mid-August and Pellegrini and his squad showed they were not distracted by institutional woes with a series of impressive performances that lifted them to first place in Champions League Group C ahead of AC Milan.
A 1-0 home win over the seven-times European Cup winners will live long in the memory of those who were at the Rosaleda.
Their dream run appeared to be coming to an end after 2004 winners Porto beat them 1-0 in last month's last 16 first leg in Portugal.
But inspired by highly-rated playmaker Isco and playing with a man extra after Porto midfielder Steven Defour was sent off just after halftime, Malaga stormed back on Wednesday to win 2-0 on the night and advance 2-1 on aggregate.
"The atmosphere in the stadium was incredible and the fans deserved a victory like this," Pellegrini said in an interview with Spanish television broadcaster Canal Plus.
"It has been an unusual year," added the Chilean when questioned about Malaga's financial difficulties.
"The team deserves a lot of credit for what they have done both in the domestic league and the Champions League.
"They maintained their focus on the sporting side and had the capacity to get to grips with all the other problems.
"Then there was a positive atmosphere coming from a desire to help the club and the players deserve huge praise for that."
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