A Mark Stewart double handed First Division leaders Raith their second league defeat on the road this season.
Raith had the best of the first-half but failed to convert and were punished by Stewart's shot inside the box.
John Baird levelled from 12 yards late on to seemingly rescue a point for John McGlynn's men.
But Stewart again pounced inside the box to clinch the points, with Ryan Flynn also hitting the post in injury time for the Bairns.
Falkirk: Olejnik, Duffie (Perry 54), McLean, Scobbie, Twaddle, O'Brien, Stewart, Millar, Compton (Higginbotham 89), McManus (Flynn 73), Finnigan.Subs Not Used: Barclay, Moutinho.
Booked: Millar, Duffie, Finnigan.
Goals: Stewart 38, 79.
Raith: McNeil, Craig Wilson, Davidson, Murray, Hill, Walker, Kevin McBride, Campbell, Scott McBride (Wales 86), Baird, Tade. Subs Not Used: McGurn, Ferry, Weir, Dyer.
Booked: Kevin McBride.
Goals: Baird 74.
Ref: Steve Conroy (Scotland).