Tranmere were knocked out of the Johnstone's Paints Trophy following a 2-2 draw against Walsall at Prenton Park, with the Saddlers coming out on top after a penalty shoot-out.
Max Power and Kayode Odejayi had put Rovers two goals to the good at half time, but second half strikes by Walsall duo Antony Forde and Michael Cain forced a shoot-out in which the visitors progressed in to the Northern area final of the competition.
Tranmere manager Micky Adams made two changes to the side which began the FA Cup tie at Oxford United on Saturday. Kayode Odejayi replaced the cup-tied Shamir Fenelon up front while James Rowe came in to replace Calaum Jahraldo-Martin who was named a substitute.
Walsall had the opening opportunity of the game on 8 minutes when Jordan Cook cut inside from the left and fired a low shot from 25 yards which fizzed narrowly wide of Owain Fon Williams' goal.
On 19 minutes, Fon Williams was called upon to deny Walsall's top goalscorer Tom Bradshaw. The Saddlers striker was played through on goal by Cook but the Tranmere goalkeeper stood up and made the save to his right.
Two minutes later and there was a chance apiece at both ends. Firstly a scuffed Bradshaw shot failed to trouble Fon Williams before seconds later Liam Ridehalgh found Cole Stockton in the penalty area and his fierce shot was well saved by Walsall goalkeeper Richard O'Donnell.
Rovers opened the scoring on 38 minutes. Ridehalgh found Max Power on the left edge of the penalty area and the midfielder curled the ball just inside the far post giving O'Donnell no chance.
Walsall had an opportunity to equalise a couple of minutes later but Michael Cain's shot lacked power and Fon Williams made a comfortable save.
Tranmere doubled their lead two minutes before half time. Power swung in a corner from the right and Kayode Odejayi rose the highest to send a powerful header past O'Donnell, the striker's first competitive goal in a Tranmere shirt.
Rovers began the second half on the front foot and seconds after the restart, a ball forward found Odejayi who held it up for the onrushing Danny Holmes who fired a low shot into the side netting.
On 50 minutes, a Power corner from the right caused problems in the Walsall six yard box with Janoi Donacien getting his head to the ball at the far post but his effort was cleared off the line before cleared to safety by the Saddlers defence.
Power thought he had scored his second of the night on 53 minutes. The midfielder was played in on goal by Odejayi and fired low past O'Donnell but the assistant referee raised his flag to signal offside.
On 62 minutes, Stockton found Steve Jennings inside the penalty area and the Tranmere captain hit a low shot which O'Donnell saved low to his left.
Less than 60 seconds later, Walsall halved the deficit. Substitute Antony Forde found himself on the right side of the penalty area and he cut in and hit a low shot past Fon Williams.
Forde had another shot on goal with quarter of an hour remaining. The Walsall midfielder received the ball 25 yards from goal and hit a powerful low shot which deflected wide of the goal before James Rowe was replaced by Marc Laird.
On 80 minutes, Walsall grabbed an equaliser. Cain picked the ball up 25 yards out and drilled home a fierce strike low to Fon Williams' right which the Welshman could do nothing about.
George Donnelly came on to replace Cole Stockton soon after before another dangerous Power corner from the right found Donacien and once again the defender's header was cleared off the line before Odejayi turned and fired into the net only for the assistant referee to flag for offside to deny him his second of the night.
With five minutes remaining, Laird tried his luck from distance with a fizzing shot across the wet turf which O'Donnell clung onto.
Laird had another chance on 89 minutes. Donnelly held the ball up before sliding the midfielder in but his shot went agonisingly wide of the target.
Fon Williams had to make a save low down to his right to deny Adam Chambers in the third minute of additional time as the game ended 2-2 and a penalty shoot-out required to decide the outcome.
Fon Williams saved the spot-kick from Walsall substitute Ashley Grimes but Liam Ridehalgh hit the crossbar and O'Donnell saved Laird's effort to ensure Walsall pass to the Northern final winning 5-4 on penalties.
1-0 Power scores
1-1 Bradshaw scores
2-1 Holmes scores
2-2 Sawyers scores
3-2 Ihiekwe scores
3-2 Fon Williams saves from Grimes
4-2 Jennings scores
4-3 Forde scores
4-3 Ridehalgh hits the crossbar
4-4 Manset scores
4-4 O'Donnell saves from Laird
4-5 Downing scores
Tranmere: Fon Williams, Holmes, Donacien, Holness, Ihiekwe, Ridehalgh, Power, Jennings, Rowe (Laird 76), Stockton (Donnelly 81), Odejayi. Substitutes: Pilling, Woodards, Jahraldo-Martin.
Walsall: O'Donnell, Purkiss, Downing, Adam Chambers, Bradshaw, Sawyers, Baxendale (Manset 55), Cain, James Chambers, Cook (Forde 45HT), Henry. Substitutes: O'Connor, Grimes, MacGillivray.
Referee: Geoff Eltringham