The Town lost out to a late penalty for the second time in two games as Stevenage took all three points from their trip to Kenilworth Road.
Olly Lee was adjudged to have fouled Ben Kennedy in the box, allowing Michael Tonge to beat Jonathan Mitchell from the spot with just five minutes remaining.
The win overshadowed a return from injury for Josh McQuoid, playing just his second game under Nathan Jones, who watched captain Scott Cuthbert hobble off midway through the second half.
Alan Sheehan came closest for the Hatters, striking the bar with his weak right foot with the Stevenage keeper left stranded, but the Town made it eight home games in a row without scoring before the break.
The gaffer made three changes from the trip to Barnet, drafting in Paddy McCourt and Joe Pigott for Pelly Ruddock and Paul Benson, while Lee also came back in for Magnus Okuonghae. That saw Glen Rea shifting back to central defence as Sheehan kept his place on the left side of the back four.
It was a fare of familiarity all round at Kenilworth Road, as Stevenage boasted three ex-Hatters of their own in their starting XI. One of those in Luke Wilkinson was in action immediately, jostling with Jack Marriott in the area, and while it seemed the Town forward was poleaxed, the referee waved away the protests.
That was as good as it got for the hosts in the early stages with Stevenage doing most of the early running, winning numerous corners aptly dealt with by the Hatters defence.
While the visitors boasted possession, it was the Town who had the first meaningful opportunity. In typical McCourt fashion, the midfielder ghosted his way across the 18-yard line before pulling back for Marriott who could only send his first-time shot into the Oak Road end.
Two minutes later, the Boro had the best chance of the half. Bradley Pritchard robbed Jonathan Smith in a central area, reverse-passing to Greg Luer to strike past Mitchell and, thankfully for the Hatters, the far post.
Marriott and Pigott cut frustrated figures in attack, but the former almost made the most of a chance to stretch his legs. The Hatters seemed unfortunate not to give away a foul on Jake Mulraney, with Marriott subsequently zooming beyond Wilkinson down the left flank. His cutback seemed destined for Pigott, but the slightest nick from a Stevenage defender saw the ball nestle calmly into the ‘keeper’s gloves.
The stroke of half-time saw the derby heat up, with Mulraney and Sheehan getting involved in handbags on the touchline. Mulraney seemed aggrieved at missing out on a decision, requiring a calming down from his teammates as both players avoided a caution to bring the half to a close.
The same Stevenage man was booked moments into the second half, however, scything down an on-rushing Smith, but McCourt and Sheehan were unable to cause danger from the subsequent, and potentially threatening, dead ball.
Sheehan came just inches away moments away, curling away a superb long-range effort, on his weaker right foot, which left Jones for dead, only for the ball to come back off the crossbar and away from danger.
The Town were clearly upping their performance after the break, with McCourt the next to take aim, whistling a shot just wide from the area’s edge, while Marriott met Jones’ gloves with a low drive from McCourt’s neat pass.
But as the Hatters were finding their feet, Stevenage had the game’s best opportunity so far. With Mitchell’s clearance blocked by a Town man, the visitors were able to exploit an overlap from which the subsequent Kennedy shot nutmegged Cuthbert but slipped a touch wide.
The Town made changes after that, bringing on Danny Green and Josh McQuoid, for his first game since January, while Cuthbert hobbled off to be replaced by Ruddock for the closing 25 minutes.
Cuthbert’s injury forced a reshuffle in the hosts’ back four as Ruddock slotted in at right-back, Stephen O’Donnell switched flanks and Sheehan sat with Rea in the middle – a completely new structure from Easter Monday’s game at the Hive.
The switch seemed to be paying off with Green testing out Jones, but the Hatters should have been ahead with 15 minutes remaining. Ruddock’s zipping run was ended in the midfield, although Smith kept the move alive to send Marriott through on goal. The striker elected to shoot with the goal beckoning, forcing the ‘keeper into a smart stop to leave a frustrated Cameron McGeehan screaming for the ball with the goal gaping.
And with just seven minutes remaining, Stevenage had a penalty. With Lee guilty of letting the ball run under his feet, the midfielder sprinted back only for the referee to adjudicate a trip on Kennedy, leaving Tonge to fire past Mitchell from the penalty spot, despite the Town stopper diving the right way.
The goal inevitably took the wind from the Hatters’ sails, subsequently misplacing several passes in a desperate bid to level the game up, much to the frustration of the Kenilworth Road faithful.
The Town poured into seven minutes of added time with a string of corners, but were unable to prevent their run of home games from starting with a defeat, leaving the total at five home wins for the season.
Hatters: Mitchell, O’Donnell, Rea, Cuthbert (sub Ruddock Mpanzu 65), Sheehan, Smith, Lee, McCourt (sub Green 62), McGeehan, Marriott, Pigott (sub McQuoid 62)
Subs not used: Justham, Lawless, Benson, Banton
Attendance: 8,502, with 347 backing Stevenage