Palace's academy side succumbed to only their second defeat of the season as they were edged out 2-1 by Sheffield United in their latest under-18s Professional Development League 2 fixture.
Despite creating many more chances than their opponents during the 90 minutes, the Eagles did everything but score and went into the break trailing after missing a spot-kick to level things up, but fell two goals behind against the run of play as the Blades put the visitors to the sword.
Corie Andrews celebrated his new professional deal with the club with a consolation strike late on to put Ken Gillard's side back in touch but it was too little too late as they left Yorkshire unfairly empty-handed.
The early chances all fell to Palace, and 12 minutes in Elliott List was unlucky to see his first-time effort well saved by Jake Eastwood in the United goal after the striker latched onto Andre Coker's fine through-ball.
After barely threatening Bradley Comins at the other end, in the 32nd minute the hosts grabbed the opening goal of the game. Some good link-up play saw Graham Kelly clip the ball into Jamie Hinchcliffe's path, and he exchanged passes with Daniel Cockerline before scoring.
But just before half-time Palace had a great chance to restore parity when Coker's shot was handled on the line by a diving Joe Cheeseman, who only received a booking, but Kiye Martin's penalty was brilliantly saved by Eastwood.
Things got worse for Palace five minute after the restart when they fell 2-0 down after another rare Blades attack. Dominic Calvin-Lewin's free-kick was nodded across goal and Cockerline netted from close range to double the lead.
Pushing to find the goal that would get them back into the game, on-loan Norwich City defender Christian Scales was inches away from marking his debut with a goal but saw his point-blank effort from a corner skid wide, and then Gillard's side's day was summed up when Andrews struck a post from a free-kick with Scales rattling the crossbar with the rebound.
Towards the end substitute Ibby Akanbi was sent through on goal by Jacob Berkley-Agyepong but again was thwarted by Eastwood before Andrews slotted a shot just wide of the target.
But the striker did find the target two minutes from time when another great pass into space by Berkley-Agyepong found the 17-year-old who beat a defender before finding the net for the third time this season, but time ran out on the Eagles before they could find a deserved equaliser.