Captain Lewis Dunk gave Brighton the lead shortly before the 15-minute mark with a header from a corner.
It wasn't all perfect for the Seagulls defender however after he was sent off eight minutes into the second half for pulling on Fabio Silva's shirt.
Substitute Adama Traore then equalised 14 minutes from time with a close-range strike before Morgan Gibbs-White's 90th-minute winner broke Brighton hearts.
Story of the match
Following a 1-1 draw with Black Country rivals West Bromwich Albion, Nuno Espirito Santo made five changes to his starting XI.
Graham Potter meanwhile only made one change from Brighton's win against Leeds United, with wide-man Alireza Jahanbaksh replacing Joel Veltman who didn't make the matchday squad.
It was the home side who made the brightest start to the game with plenty of chances coming their way in the opening five minutes.
Rayan Ait-Nouri's superb run down the left-hand side allowed him to cut the ball back for Vitinha who struck low on goal but his effort was tipped away by Robert Sanchez for a corner.
Despite the strong start, it was in fact the visitors who would take the lead in the West Midlands.
With their first effort on goal, Seagulls captain Dunk rose highest from a corner unchallenged after 13 minutes to nestle the ball into the bottom corner.
The centre-back nearly doubled his tally 10 minutes later from a corner again. Peeling away from his marked man, Dunk sent a looping header towards the way of goal but Rui Patricio was able to tip the ball away for another corner.
Brighton then came froward again as they began to exert their dominance on the game.
Leandro Trossard's dinked ball into the Wolves box was cushioned down well by Danny Welbeck, dropping to the feet of Neal Maupay but his effort could only be blazed over the bar.
Wolves came out of the blocks after the restart and had the first chances of the half as they went in search of an equaliser.
Max Kilman picked the ball up inside the Brighton half and drove forward before unleashing a shot from range, however his effort was tame and easily collected by Sanchez.
Moments later and Wolves came even closer. Morgan Gibbs-White did well with his back to goal before spinning away from his man to try and arrow a shot at the front post as Sanchez again was there to palm his strike away for a corner.
Goalscorer Dunk had been enjoying a fine game but went from hero to zero after 53 minutes when he was shown a straight red card.
Joao Moutinho's tidy footwork enabled him to release a ball for striker Fabio Silva to run onto. With the goal at his mercy, Silva was prevented from breaking away as Dunk clung onto his shirt, giving referee John Moss no option other than to send him off.
It took time for life to really breathe into Wolves following the dismissal with a good chance coming courtesy of Moutinho.
The experienced midfielder did well to control the ball down in the air and tee himself up for a volley, but whilst his strike lacked the power it needed, it did enough to make Sanchez turn the effort away for a corner.
Wolves had become more and more threatening as their persistence paid off as Traore equalised in the 76th minute.
As the hosts tried to find their opening, some tidy exchanges between Vitinha and Silva helped to find the substitute just inside the box and the Spain international rifled the ball into the back of the net to equalise.
Wolves then missed a golden opportunity to make it 2-1. Brighton keeper Sanchez poorly misjudged the bounce of the ball to allow Traore through on goal.
With Brighton defenders recovering to close down the angle, Traore laid the ball back for fellow substitute Willian Jose but he fired over from close range instead.
In the end, the man advantage played to Wolves' strengths as they struck a late blow at the end of the game to take home the win.
A low-driven ball from Ait-Nouri into the box created a scramble as Brighton tried to clear their lines, but Morgan Gibbs-White was there on hand to thunder the ball into the top corner and complete the turn-around for the hosts.
Traore the game changer
Before his entrance to the pitch, Wolves looked toothless and void of ideas in attack but the fresh arrival of Traore changed the game.
His frightening pace was deafening at times as he coasted past Brighton defenders and his goal and contribution in the winner proved to be vital as Wolves held on for the win.
Red card Brighton's downfall
Whilst they couldn't mathematically secure their place in the Premier League for next season today, Brighton will be left disappointed by the way they threw the game away.
Up until the red card, they looked like they would be well on the way for the win however the lapse of concentration from their captain resulted in a silly sending off which was ultimately their downfall.
Despite the defeat, it's hard to see Brighton being in any serious troubles of relegations and even though it didn't come today, it will only be a matter of time before they secure their place in the top-flight for next season.