Shaun Williams scored a last-minute penalty for MK Dons to end Sheffield United's unbeaten start to the League One season.
In an even first half, Nick Blackman tested Dons keeper David Martin and Ryan Lowe should have done better for the hosts from Angelo Balanta's cross.
Blades goalkeeper George Long saved well from Lowe after the interval.
Williams scored the winner from the spot after David McAllister brought Dean Bowditch down in the area.
Sheffield United, who are second in League One, have won eight and drawn eight of their opening 16 games before Saturday's defeat, but have only scored 19 goals.
The Blades remain second in the table but now trail Tranmere by five points, while the Dons are seventh and outside of the play-offs on goal difference only.
VIEW FROM THE DRESSING ROOM
Sheffield United manager Danny Wilson told BBC Radio Sheffield:
"I'm livid with the penalty, it's an absolutely disgraceful decision and the referee has got it totally wrong.
"The MK Dons fans had a pop at him at the end of the first half for not giving a penalty and it was a penalty and I admit that but that doesn't make any difference.
"His performance in the second half was very, very poor.
"We have to live by it but we deserved at least a draw."
Live Text Commentary
Full Time The referee blows his whistle to end the game.90:00 +1:27 Substitution
Substitution Mathias Doumbe replaces Angelo Balanta.89:47 Goal scored
Goal! - Shaun Williams - MK Dons 1 - 0 Sheff Utd Penalty taken left-footed by Shaun Williams and scored. Milton Keynes Dons 1-0 Sheff Utd.88:45 Booking
Booking Michael Doyle is shown a yellow card for dissent.88:19
Dean Bowditch fouled by David McAllister, the ref awards a Penalty.87:41
A cross is delivered by Angelo Balanta, Harry Maguire makes a clearance.86:57
The ball is sent over by Darryl Westlake.86:31
Michael Doyle concedes a free kick for a foul on Luke Chadwick. Antony Kay takes the direct free kick.85:48
The ball is crossed by Angelo Balanta, save by George Long.83:28
Darryl Westlake challenges Angelo Balanta unfairly and gives away a free kick. Direct free kick taken by Stephen Gleeson.82:57
Darren Potter fouled by Kevin McDonald, the ref awards a free kick. Antony Kay takes the free kick.79:26
Effort from long distance by Angelo Balanta goes wide right of the goal.76:12
Effort on goal by Dean Bowditch from long range goes over the crossbar.75:22 Booking
Booking Harry Maguire receives a yellow card for unsporting behaviour.73:14 Substitution
Substitution Shaun Miller comes on in place of Nick Blackman.70:54
Shaun Williams takes the inswinging corner, George Long makes a save.70:20
Foul by Chris Porter on Darren Potter, free kick awarded. Direct free kick taken by Antony Kay.68:58
Effort on goal by Luke Chadwick from just outside the penalty area goes harmlessly over the target.67:18
Luke Chadwick gives away a free kick for an unfair challenge on Michael Doyle. Direct free kick taken by George Long.66:47
The referee blows for offside. Direct free kick taken by David Martin.
Free kick awarded for a foul by Neill Collins on Antony Kay. David Martin takes the free kick.65:21
Free kick awarded for a foul by Shaun Williams on Chris Porter. Darryl Westlake restarts play with the free kick.62:11
Dean Lewington crosses the ball, David McAllister gets a block in. Dean Bowditch takes a inswinging corner from the left by-line played to the near post. Inswinging corner taken right-footed by Dean Bowditch played to the near post, save by Michael Doyle. Corner taken by Dean Bowditch from the left by-line, save by Harry Maguire.61:00
Centre by Darryl Westlake, save by Antony Kay.60:08
Dean Bowditch fouled by Marcus Williams, the ref awards a free kick. Free kick taken by Jon Otsemobor.59:15
The ball is sent over by Jon Otsemobor, save by Neill Collins.56:53 Substitution
Substitution Alan Smith is brought on as a substitute for Ryan Lowe.56:53
Kevin McDonald is penalised for a handball. David Martin takes the free kick.55:29
Ryan Flynn delivers the ball. The assistant referee flags for offside against Nick Blackman. Free kick taken by David Martin.52:11
Michael Doyle takes a shot. Antony Kay gets a block in. David McAllister fouled by Dean Lewington, the ref awards a free kick. George Long takes the direct free kick. Kevin McDonald takes a shot. Save by David Martin. Nick Blackman is caught offside. Free kick taken by Dean Lewington.51:21 Booking
Booking Booking for Luke Chadwick.51:11
Luke Chadwick challenges Michael Doyle unfairly and gives away a free kick. Direct free kick taken by George Long.50:49
A cross is delivered by Angelo Balanta, Marcus Williams manages to make a clearance.49:56
Ryan Lowe takes a shot. Save made by George Long.48:48
Dean Lewington fouled by David McAllister, the ref awards a free kick. Shaun Williams takes the free kick.45:52
Darryl Westlake fouled by Angelo Balanta, the ref awards a free kick. George Long takes the free kick.45:02 Substitution
Substitution Matthew Hill leaves the field to be replaced by David McAllister.45:01
The game restarts for the second half.45:00 +2:30 Half time
Half Time The ref blows to end the first period.45:00 +1:52
Angelo Balanta takes a shot. Save by George Long.45:00 +1:27
Unfair challenge on Darren Potter by Nick Blackman results in a free kick. Direct free kick taken by Darren Potter.45:00 +0:35
Stephen Gleeson takes a shot. Save by George Long.44:01
Headed effort on goal by Ryan Lowe from inside the penalty box misses to the right of the goal.42:10
The ball is crossed by Jon Otsemobor. Corner taken by Dean Bowditch.40:53
Angelo Balanta takes a shot. Save made by George Long.39:33
The ball is crossed by Angelo Balanta, Harry Maguire makes a save.37:01
Chris Porter challenges Jon Otsemobor unfairly and gives away a free kick. David Martin restarts play with the free kick.34:59
The official flags Ryan Lowe offside. George Long takes the direct free kick.34:39
Foul by Matthew Hill on Stephen Gleeson, free kick awarded. Free kick taken by Jon Otsemobor.33:40
Free kick awarded for an unfair challenge on Angelo Balanta by Darryl Westlake. Dean Lewington restarts play with the free kick.32:18
Dean Bowditch concedes a free kick for a foul on Matthew Hill. Ryan Flynn crosses the ball from the free kick right-footed from left wing.32:00
Nick Blackman takes a shot. Save made by David Martin.31:18
The official flags Luke Chadwick offside. George Long takes the free kick.30:17
Darren Potter fouled by Kevin McDonald, the ref awards a free kick. Darren Potter takes the free kick.29:34
Dean Bowditch delivers the ball, blocked by Matthew Hill.28:13
Free kick awarded for a foul by Chris Porter on Jon Otsemobor. Jon Otsemobor takes the direct free kick.24:08 Substitution
Substitution Darryl Westlake comes on in place of Tony McMahon.24:08
Nick Blackman fouled by Jon Otsemobor, the ref awards a free kick. Kevin McDonald takes the direct free kick.22:14
Nick Blackman has an effort at goal from outside the area which goes wide left of the target.21:22
Ryan Lowe challenges Harry Maguire unfairly and gives away a free kick. George Long restarts play with the free kick.19:31
Effort on goal by Dean Bowditch from outside the box goes harmlessly over the bar.18:21
Free kick awarded for an unfair challenge on Marcus Williams by Jon Otsemobor. Free kick taken by Tony McMahon.17:28
The referee blows for offside against Dean Lewington. George Long restarts play with the free kick.15:23
Ryan Lowe takes a shot. Save by George Long.13:57
Shot from just outside the box by Angelo Balanta goes over the crossbar.13:41
Centre by Dean Lewington, Harry Maguire makes a clearance.12:21
Corner taken by Kevin McDonald from the left by-line played to the near post.10:56
Ryan Flynn sends in a cross, clearance made by Shaun Williams.8:40
The ball is crossed by Dean Lewington, Matthew Hill makes a clearance.7:01
Marcus Williams produces a cross, David Martin makes a save.6:34
The ball is delivered by Ryan Lowe.2:32
Effort on goal by Luke Chadwick from outside the box goes harmlessly over the bar.1:55
Darren Potter fouled by Marcus Williams, the ref awards a free kick. Direct free kick taken by Jon Otsemobor.0:00
The match has kicked off.
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