Nine-man Peterborough claimed a fantastic victory to end rivals MK Dons' unbeaten start in the league.
Posh's Nathaniel Knight-Percival was sent off early for an elbow on Patrick Bamford, but Lee Tomlin put them ahead from the penalty spot after Dean Lewington felled Danny Swanson.
The hosts were soon 2-0 up when Britt Assombalonga struck from a tight angle.
Dons sub Izale McLeod pulled one back, but Posh held on despite Mark Little's red for fouling Lewington.
It was a phenomenal defensive display by the hosts, which featured a string of fine saves by keeper Bobby Olejnik, and ensured they remained second in the table.
Meanwhile MK Dons, whose only other defeat this season was away at Sunderland in the Capital One Cup, find themselves in eighth place.
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MK Dons manager Karl Robinson told BBC Three Counties Radio:
"Today we had chances and didn't take them, so we've just got to get more ruthless in that final third.
"They're a good team, definitely as good as it gets at this level. But when Luke Chadwick has a sitter and then from that break they score their second goal, you can't legislate for that.
"I don't think we could have done any more, maybe lady luck wasn't on our side.
"We're sorry we've not won you the derby you wanted us to win. We're just as disappointed as you, but we'll put it right in the next couple of weeks."
Peterborough 01 Olejnik 02 Alcock 06 Bostwick 07 Swanson Booked (McCann - 67' ) 08 Payne 09 Assombalonga Booked 10 Tomlin Booked 14 Rowe 20 Knight-Percival Dismissed 23 Barnett Booked (Ntlhe - 80' ) 31 Little Dismissed Substitutes 13 Day 03 Ntlhe 05 Zakuani 11 McCann 17 Newell 19 Mendez-Laing 28 Gordon-Hutton Milton Keynes Dons 01 Martin 02 Otsemobor 03 Lewington 06 Williams 07 Gleeson 08 Potter 10 Chadwick (Smith - 62' ) 15 Bamford 22 Carruthers (Baldock - 35' ) 23 Green (McLeod - 46' ) 24 Kay Substitutes 16 McLoughlin 05 Hodson 14 Alli 18 Baldock 21 Banton 11 Smith 13 McLeod