A sloppy opening 45 minutes did the damage for an out-of-sorts Palace under-18 side as they conceded three times in the opening half to an impressive Ipswich side in Suffolk.
After impressing during last week's 4-4 draw with Huddersfield Town, Ken Gillard's boys were punished by the Tractor Boys for a lack of concentration at the start of the game, but did show some fight after the restart to finally impose themselves on their opponents.
The scoring started early on when Palace were caught napping by a quick throw-in and Ed Ellis got in behind the defence to net the opener.
Soon after the game's turning point arrived when Palace had a golden chance to equalise. Corie Andrews rounded the goalkeeper but saw his shot cleared off the line, and from the resulting corner Ipswich countered and striker Cemal Ramadan capped off a fine passing move with a decent finish.
The Republic of Ireland U17 international was celebrating scoring his second shortly after when Bradley Comins did well to parry a goal-bound strike but Ramadan followed up to tap home the rebound and put the game beyond doubt.
After the break Palace created a number of chances to try and reduce the deficit, with Elliott List in particular unlucky to see a one-on-one saved, but ultimately it wasn't to be the Eagles' day.