They suffered a shock home defeat - their first in ten games - against a Preston side which finished the game with only nine players.
In a nerve-tingling match, Keith Fahey raised Birmingham's hopes of a win with a 57th minute strike only for Preston's skipper Paul McKenna to spoil the party with his 69th minute equaliser which also marked his record 473rd appearance for the north west club.
Ross Wallace then scored direct from a free kick in the 89th minute to completely dash Birmingham's hopes as Preston completed the double over the Blues.
Birmingham now have to go to Reading for the final game of the season to decide their fate and on this performance there is no guarantee that they will win second spot.
For the third successive home game Birmingham finished with ten men after they had Lee Bowyer sent off in a second half incident with Lee Williamson which also earned the Preston man the red card.
As Birmingham had only scored eleven goals in their previous nine home games during which they had been unbeaten, it was hardly surprising that the Midlands club created so few real chances.
Their inability to make a real impact enabled Preston to hit back with the bulky John Parkin hitting the far post with a cross-shot.
Birmingham themselves were fortunate not to concede two penalties when Radhi Jaidi brought down Neil Mellor and Franck Queudrue handled a high cross.
The game suddenly exploded in a frantic four minute spell. Birmingham had sent on Cameron Jerome for the injured Seb Larsson in the 54th minute and three minutes later they took the lead.
James McFadden provided the right-wing cross which finished with Fahey ghosting in from the left to guide home a neat header for his third goal since his arrival last January.
In the 61st minute Bowyer, who had earlier been booked, was involved in a tangle with Williamson and referee Phil Dowd had no hesitation in sending off both players.
Preston's response was to shock the home with a terrific equaliser from skipper McKenna when he hammed home a 30-yard drive after picking up a pass from Ross Wallace.
Wallace then slammed a free-kick through a fragile defensive line a minute before time with the ball going in off the post.
Wallace celebrated by taking off his shirt as he raced towards the small Preston following and earned a second yellow card.