Blackpool's bid to return to the play-off zone was thwarted by a St Helens side battling against relegation in the Hallmark Security League first division.
READ MORE: AFC Blackpool 5 Eccleshall 0
Blackpool went into the game on the back of a resounding 5-0 home win over Eccleshall but Town belied their position in the bottom three.
St Helens dominated the first half, allowing AFC very few chances, though it was the home side who went closest to scoring when captain Martin Baird's shot was cleared off the line.
The home fans were hoping for a better performance in the second half and Ben Fishwick went close, shooting just over.
However, it was St Helens who who broke the deadlock in the 67th minute through Michael Furlong and Shaun Brady doubled the lead eight minutes later.
AFC manager David Worthington made changes in a bid to get back into the game and Baird halved the deficit with a close-range header on 82 minutes.
And the fans in the Tin Hut had their celebrations cut short when Billy McKenna's last-gasp 'equaliser' was disallowed for handball.
AFC have lost no ground as Alsager Town, immediately below them in eighth, lost 3-0 at home to Whitchurch Alport last night.
Blackpool must regroup for a third home game in eight days against second-placed Litherland REMYCA on Saturday.
Blackpool: Kirkland, Baird, Betteridge, Caunce, Mottram, Fishwick, Gregory, Hargreaves, Duffield, McKenna, Dawson; subs; Donaghy, Speight, Bishop, Taylor, Williams.