Spurs failed to find a way past a resilient Hammers side in the first half of the Premier League clash at White Hart Lane, and were then stunned by goals from Winston Reid, Ricardo Vaz Te and Ravel Morrison within 13 minutes in the second half.
It was only the visitors' second win on the road in 2013 and snuffed out Spurs' hopes of going to the top of the table before the international break.
"West Ham deserve full credit, they played very, very well," said Villas-Boas.
"The first half we played well, but not enough to score. We started the second half very strongly, but unfortunately for us their set-play goal came a little bit against the run of play.
"They totally deserved it, and every time we tried to make changes to come back into the game, they scored again. The three goals came in a quick sequence, which did not allow us to bounce back and react.
"We wanted to throw in all our weapons but as we were ready to put Soldado on, they made it 2-0. It made it even more difficult to come back into the game.
"We never had that chance, but West Ham did extremely well in the second half. They were very aggressive, getting to the ball first and they deserved the result."
The day's results see Spurs slip back to sixth place, three points behind leaders Arsenal, who drew 1-1 at West Brom.
Villas-Boas added: "We need to bounce back against Aston Villa and make sure we stay connected to the top.
"It's a wake up call that we have to react to and I trust the team to do that."