Substitute Stephen Garrett scored a stoppage-time winner for champions Cliftonville at Drumahoe.
The Reds had taken an early lead when recent signing David McDaid shot in his first goal for the Belfast side.
Declan McKeever got 'Stute level with a deflected shot over Conor Devlin but Chris Curran restored Cliftonville's lead in the 16th minute.
Stephen Curry smashed in Institute's second equaliser before half-time but they fell to Garrett's last-gasp goal.
It means Cliftonville are level on seven points with leaders Ballymena who have a slightly better goal difference.
It was heartbreak for Premiership new boys Institute who had started the campaign with a draw at Dungannon and a home win over Coleraine.
They responded well after former Derry striker McDaid scored in the second minute from Martin Donnelly's ball.
McKeever's ninth-minute deflected equaliser came after a Curry's ball had been cleverly dummied by Stephen O'Flynn.
Curran then had plenty of time to fire Cliftonville in front again after Donnelly's through ball.
Curry smashed an emphatic finish into the roof of the net from O'Flynn's through ball for 2-2 on 29 minutes.
That is the way it stayed until McDaid's quickly-taken free sent Garrett through for the late winner.