The 18-year-old midfielder, making his debut in Europe's elite competition, had just played a routine pass when he suddenly sat down on the turf and signalled for medical assistance.
He was immediately attended to by club doctors and transported to hospital for further examination.
Dortmund later confirmed that the Greek international had suffered circulatory problems.
"Konstantinos Karetsas had to leave the field due to circulatory problems," the club said in a statement. "Kosta is doing well under the circumstances and is on his way to the hospital for further tests."
Manager Niko Kovac addressed the incident after his side's 3-2 victory, revealing that he had reassured the squad at half-time that their teammate was in a stable condition.
"It is circulatory problems. He is in hospital, being examined. We don't know any more details yet, so please understand that I can't say any more about it," Kovac said.
"But I told my team at half-time that everything is OK. They are of course worried."
Sporting director Ole Book echoed those concerns, admitting the episode had cast a pall over the result.
"We don't know much more. It came very suddenly, he sat down and was taken to hospital for further examinations, where he still is. We're waiting now. That definitely dampens the mood," Book said.
"He wasn't ill before. The fact that he missed the final training session was for other reasons, he had a few different problems there."
Managing director Lars Ricken described the collapse as coming "out of nowhere," adding that there had been no warning signs in the build-up to the match.
Karetsas joined Borussia Dortmund from KRC Genk in July for a fee of €30 million and was one of the club's marquee summer acquisitions.
The former Belgium youth international had been expected to play a central role in Dortmund's European campaign alongside fellow new arrival Giannis Konstantelias, who suffered a season-ending ACL injury on his Bundesliga debut last month.
The club have indicated that further updates on Karetsas's condition will be provided once hospital tests are complete.