The Queensland Reds beat the Blues 37-31 in Brisbane to leapfrog the Auckland side at the top of the Super Rugby standings.
The Blues had won seven straight games and were unbeaten in nine, and fought back from a 24-0 deficit after 30 minutes to get within three points of the lead with 20 minutes remaining but were unable to close out the match.
It was 27-14 at half-time.
The Australian side now have 50 points, one ahead of the Blues, who remain in second place but could be under pressure from the Crusaders, who are on 44 points and play the Cheetahs of South Africa later in the weekend.
The Reds, playing a high tempo game, dominating possession and feeding off Blues' mistakes, had raced to the 24-0 lead with Quade Cooper, hooker Saia Faingaa and blindside flanker Scott Higginbotham all scoring tries.
The Blues, however, showed how dangerous they can be with blindside flanker Chris Lowrey and replacement Lachie Munro grabbing tries within three minutes of each other.
Luke McAlister converted to drag his side back into the match though Cooper added his second penalty right on halftime to give the Reds a 27-14 lead at the break.
The Blues reduced the deficit shortly after the break when Alby Mathewson scored his side's third try following a burst from first five Stephen Brett, and they got back to 27-24 when McAlister slotted a 58th minute penalty.
However, replacement hooker James Hanson charged down a Brett clearance kick and flopped on the ball shortly after.
Cooper restored the 10-point advantage with the conversion then extended it with 11 minutes remaining with his third penalty.
While the Blues hammered away at the line, silly passes and turnover when the Reds' defence was tiring cost them any chance of a last-gasp victory though Rene Ranger's late try ensured they got two bonus points.