Southern California (6-2, 3-2) had not lost a game by more than a touchdown since a 27-16 loss to Notre Dame in 2001, Pete Carroll's first season as Trojans coach. It was USC's worst lost since a 35-7 defeat to Arizona State on Oct. 11, 1997 and the most points allowed by the Trojans in Carroll's tenure.
Oregon remained alone in first and undefeated in the Pac-10, threatening USC's hold on the league championship for the past seven years.
Oregon fans were decked out in special black "Fright Night" T-shirts with a duck-and-crossbones motif to commemorate the Halloween night game - billed as the Pac-10's biggest game of the season. Afterward the fans swarmed the field, while a ring of blue-jacketed security guards circled the goal posts.
It turned out to be a Fright Night for USC's defense, which allowed 613 yards.
The Ducks have won seven straight games since an embarrassing 19-8 loss at Boise State in the opener, a game that got uglier when running back LeGarrette Blount punched a Broncos defensive end as he was leaving the field.
Blount was suspended for the season and Oregon moved on without him. James was his replacement.
USC freshman quarterback Matt Barkley, who earlier this week predicted he would feed off Autzen's deafening noise, completed 21 of 38 passes for 187 yards and two scores. He was intercepted once.
Masoli completed 19 of 31 for Oregon, which had never before scored as many points against the Trojans.
USC went up 3-0 on the its first series of the game on Jordan Congdon's 28-yard field goal. Oregon answered with Morgan Flint's 32-yarder, but the Ducks had squandered their opportunity after Kenjon Barner's 77-yard kickoff return.
Masoli scored on a 3-yard run to put the Ducks up 10-3 late in the first quarter. USC tied it with Barkley's 3-yard pass to Ronald Johnson early in the second.
Oregon went ahead again on Andre Crenshaw's 1-yard scoring run. And USC tied it again at 17 on Barkley's 4-yard pass to Damian Williams.
Masoli found Jamere Holland with a 17-yard touchdown pass to put the Ducks back up 24-17 at the half.
From that point, USC couldn't keep up.
After Oregon extended the lead with Flint's 35-yard field goal, USC narrowed it with Congdon's 39-yarder.
James scored on a 5-yard run and fellow redshirt freshman Kenjon Barner ran for a 3-yard touchdown to make it 41-20 at the close of the third quarter.
Flint had a pair of field goals from 22 and 23 yards out to pad Oregon's lead in the fourth quarter.
Pac-10 commissioner Larry Scott, who was at the game, said he planned to stay in Eugene to meet with Blount and school officials over possible reinstatement.
Scott says he'll meet with Blount, Oregon counsel, university president Richard Lariviere, athletic director Mike Bellotti and coach Chip Kelly and members of his staff.
He says the university has not made formal moves to reinstate Blount and his role "completely depends on the university and whether they want the penalty revisited."
The Trojans have lost four straight in the state of Oregon.