Two goals against the run of play saw the Dons fall to a defeat at stadiummk.
Former Don Stephen Gleeson and Jacques Maghoma found the net in the second half for the visitors, who frustrated a Dons side that dominated possession.
Despite the defeat, the men from MK1 picked up an encouraging seven points from their opening five Sky Bet Championship fixtures heading into the international break.
Karl Robinson made one change from the last Sky Bet Championship fixture – the 0-0 draw at Reading, recalling Sam Gallagher to the starting XI in place of Simon Church.
A lively opening 10 minutes included a strong penalty appeal for the Dons, who felt Dean Bowditch had been fouled in the box but nothing was given.
Both sides settled quickly with the game being played at a high tempo and a lot of quality on show, none more so than when Gallagher brilliantly got away from his man on 11 minutes but Rob Hall couldn’t latch on to his cut-back.
At the other end, David Cotterill fired an effort wide from 20 yards after pouncing on a loose ball – the only real opportunity for the visitors in the opening 20 minutes.
Robinson’s men were seeing more of the ball and enjoying more of the territorial advantage but only had half-chances to show for it, Hall the latest to drag a shot wide from inside the box.
The tricky winger went very close to breaking the deadlock on 32 minutes when he crashed a 20-yard effort narrowly past the left-hand post.
An injury to Jordan Spence forced the right-back to be replaced four minutes later by Lee Hodson, who was recently recalled to the Northern Ireland squad for their Euro 2016 qualifiers.
The Dons ended the half by far the stronger of the two teams and they almost capitalised on that pressure on the stroke of half-time but Samir Carruthers placed his shot the wrong side of the post.
David Martin made his first save of the afternoon in injury-time, comfortably gathering Maikel Kieftenfeld’s long-range effort.
The impressive Hall turned his man inside and out on the Dons’ first real attack of the second half but he slightly over-ran it.
Gallagher then headed wide before Hall was caught offside after being found by Carruthers, who had brilliantly made 30 yards.
But it was the visitors who took the lead on 57 minutes when former Don Stephen Gleeson curled the ball home from 20 yards - Martin had no chance with a clever finish.
Hodson’s cross-cum-shot forced Tomasz Kuszcsak into a smart save on 65 minutes before Diego Poyet directed a low drive just wide after Birmingham failed to clear.
The visitors made it 2-0 on the counter attack with 10 minutes remaining, substitute Jacques Maghoma racing on to Clayton Donaldson’s pass and coolly slotting the ball past Martin.
Dons didn't give up, pushing forward as they looked for a way back into the game but, ultimately, to no avail.
MK Dons: Martin; Spence (Hodson 36), Kay, McFadzean, Lewington (c); Potter, Poyet; Hall, Carruthers (Baker 67), Bowditch (Murphy 67); Gallagher.
Unused subs: Cropper, Upson, Powell, Church.