For the second week in a row, Palace were edged out late on by a south London rival as Millwall clinched a single goal victory in Beckenham.
The game was switched to the home of the Eagles at short notice, but despite finding themselves with home advantage Palace couldn't find an early breakthrough in a half of few opportunities, with the best falling to Emmanuel Yeboah at the back post on 14 minutes when his shot was pushed away by Lions keeper Sam Jackson.
However after the restart the Eagles were much more lively and five minutes into the second half Francis Jno Baptiste was through on goal but shot straight at the keeper's legs, and on the hour James Daly was introduced from the bench and he was fractions away from squaring to an unmarked Bryce Hosannah or Baptiste but his pass was intercepted at the crucial moment.
With 15 minutes to go, Palace were twice thwarted in quick succession when Jason Lokilo got down the left and stood the ball up for Hosannah at the back post, but his shot hit the keeper and came back out to Baptiste. Palace's top scorer looked set to fire in his eighth goal of the campaign, but at the last minute a defender got in the way and blocked his attempt.
However the visitors hit the Eagles with a sucker punch with eight minutes to go, when a mix-up in defence after a controversial quickly-taken free-kick allowed substitute George Alexander to seize on the lapse in concentration and snatch a derby day victory.