Tranmere's 19 match unbeaten home run in League One came to an end as a second half goal was enough to give MK Dons all three points.
It was a match that could have gone either way, with Rovers twice hitting the visitors' woodwork and carving out a number of other chances, while MK Dons also hit the Tranmere bar. However, the failure to convert proved costly for Rovers as they lost for the first time in league action at Prenton Park since October 2008.
John Barnes fielded an unchanged side from the 4-2 win over Gillingham, with Craig Curran again partnering Ian Thomas-Moore in attack.
A quick pass from Alan Mahon set Curran loose inside the second minute and the striker's 25 yard shot had to be caught by Dons keeper Willy Gueret.
Rovers had started brightly, keeping possession inside the Dons half and stretching the visitors from side to side. On eight minutes a well struck Mahon cross reached Thomas-Moore but the striker couldn't get a good enough contact to redirect the ball towards goal.
On ten minutes a defensive clearance from Sol Davis fell straight to Chris Shuker 25 yards out and the midfielder's dipping volley had to be palmed away by Gueret. From the corner that followed Rovers kept up their pressure with Gavin Gunning heading over the bar.
A Mahon shot deflected wide for a corner on 14 minutes, while Jason Puncheon fired over for Dons soon after from a tight angle.
Gunning turned a shot past the post from the edge of the area following another Tranmere corner on 18 minutes.
The closest effort yet came on 20 minutes. A floated cross from Shuker was met by Curran ten yards out and his looping header was excellently turned over the bar by Gueret. Four minutes later John Welsh curled over the bar from the edge of the area after being picked out by Curran.
At the other end two wonderful tackles from Goodison denied Jermaine Easter as the striker raced towards the Rovers goal.
A poor ball from Logan gave MK Dons possession on 41 minutes and seconds later Easter's low shot had to be turned around the post by Daniels for a corner - the last real action of the&nbsp;half.
Rovers started the second half well. On 50 minutes Thomas-Moore smashed a half volley that had beat Gueret but struck the bar. Three minutes later the striker hit the bar from close range while Mahon and Welsh both saw well struck shots blocked and Curran failed in an overhead attempt.
The near misses drew a fantastic reaction from the crowd and Rovers kept pushing forward. Thomas-Moore went down as he tried to reach a cross from Cresswell but the penalty appeals were turned down, while Mahon chipped the ball up for himself before sending a tricky cross into the area which Gueret did well to hold.
Daniels saved low down from Jason Puncheon on 57 minutes as Paul Ince's side delivered a reminder that the game was far from over and the Dons should have taken the lead three minutes later when Easter shot over from six yards from an unmarked position.
The striker's next shot beat Daniels but rattled back into play off the cross bar, and Mahon curled a shot wide at the other end soon after.
The first change of the game saw Goodison replaced by Ash Taylor, perhaps to add more pace to the Rovers defence, while Gareth Edds and Terry Gornell came on for Mahon and Thomas-Moore respectively on 73 minutes.
However, the visitors took the lead on 81 minutes. A low cross from the Dons left from Jemal Johnson went through the six yard box and was turned into the net, with substitute Jabo Ibhere perhaps getting the final touch.
A goal line clearance denied Gornell an equaliser in the second minute of injury time, the last chance of the game for Tranmere.
Tranmere: Daniels, Logan, Goodison (Taylor 64), Gunning, Cresswell, Shuker, Welsh, McLaren, Mahon (Edds 73), Curran, Thomas-Moore (Gornell 73). Substitutes not used: Collister, Fraughan, Barnett, Macauley.
MK Dons: Gueret, McCracken, Gleeson, Easter, Johnson (Partridge 87), Carrington (Ibhere 67), Puncheon, Davis, Howell, Powell (Woodards 29), Chadwick. Substitutes not used: Searle, Bridges, Chicksen, Flanaghan.
Referee: Jon Moss
Yellow cards: Welsh (39), Gleeson (45+2), Ibhere (90+1)