Veteran striker Antonio Di Natale struck a second-half winner for Udinese to put the brakes on AC Milan's Europa League qualification push on Saturday.
Milan's third defeat in seven games under Clarence Seedorf dropped the Rossoneri one place to 11th in the table with a six-point deficit to fifth-placed Inter, who host Torino on Sunday.
Seedorf welcomed Mario Balotelli back into his squad after a two-game absence due to a shoulder injury.
But with a decisive second leg against Champions League last 16 opponents Atletico Madrid in midweek, Seedorf opted to rest a number of regulars.
Brazilian forward Kaka was on the bench throughout with Keisuke Honda, Valter Birsa and Robinho playing in support of striker Giampaolo Pazzini.
Udinese forged the opening chance when Roberto Pereyra's run down the left ended with 'keeper Christian Abbiati making a desperate one-handed save.
However Milan failed to capitalise on several early chances with Pazzini, wearing a protective face mask, missing the target with two headers and then Cristian Zapata spurning a good chance for the opener when his diving header at the back post sailed well over.
Pazzini had a chance to make amends but teenaged Udinese 'keeper Simone Scuffet pulled off a fine one-handed save and then parried Robinho's snapshot.
Milan continued in the same vein after the interval, with Robinho forcing Scuffet to parry his header from Urby Emanuelson's cross on 49 minutes.
Di Natale missed a great chance for the hosts on the hour after Philippe Mexes gave up possession.
Balotelli replaced an ineffective Robinho just after the hour, but minutes later the Rossoneri were trailing after Di Natale finished off a smart passing move with Roberto Pereyra and Bruno Fernandes to beat the diving Abbiati with an easy tap-in.
Milan fought back in the closing stages and Michael Essien, who replaced Birsa just before the hour, saw a header from a corner scare Udinese as Balotelli lurked nearby.
Balotelli saw a tame free kick come to nothing, and Essien's long-distance drive was high and wide.
In the closing minutes Pazzini was unlucky not to get on the end of Balotelli's through ball which, ultimately, was out of the striker's reach.