An 89th-minute winnner by Ivo De Jesus for the Melbourne Knights has ended Newcastle's 12-match unbeaten run in the NSL.
United's loss allowed leaders Perth Glory, despite being held 0-0 at home by South Melbourne, to go seven points clear.
The Knights' 2-1 win at Knights Stadium lifted them intothe top six as the battle for the playoffs intensifies.
Newcastle's loss, their first of the season, saw them drop out of the top two, with their place being taken by the Brisbane Strikers, who beat the Football Kingz by the same score on Friday night.
After a scoreless first half, Robbie Middleby put Newcastle ahead early in the second spell. Andrew Marth headed the equaliser in the 61st minute before the combination of Tota Da Costa and De Jesus conjured a late winner.
Olympic Sharks also got themselves into contention - a 4-1 away win over Sydney United enough to lift them into fourth place ahead of Marconi Stallions, who were held 1-1 at home by Wollongong.
The Sharks began strongly with goals to Jade North in the third and 40th minutes. Substitute Tom Pondeljak added a third and Lindsay Wilson a fourth in the 79th minute.
Zeljko Kopic scored for Sydney United.
Northern Spirit gained only their second home win in 13 months when, in the 41st minute, Adrian Cervinski pulled down a cross from Pablo Cardozo and then beat Parramatta Power goalkeeper Les Pogliacomi from 10m. Spirit held on for a 1-0 victory, despite plenty of pressure from the visitors.
Adam Kwasnik missed a chance for a late equaliser when he hit the crossbar from less than 5m.
In feature matches this week Newcastle are at home to Northern Spirit, Marconi entertain Perth and the Kingz are away to South Melbourne in a game that should produce plenty of action.
