The Hatters suffered a narrow 1-0 defeat against rivals Watford in a tightly contested game at Vicarage Road.
Joao Pedro scored the only goal ten minutes before half-time and Town were unable to find an equaliser despite a number of promising chances throughout the 90 minutes.
Manager Nathan Jones made one change from Town’s last league fixture against Derby County – with Ryan Tunnicliffe coming in for the unavailable Glen Rea.
Simon Sluga was called into action early on, saving well from Pedro down low during a cagey opening to the game.
Later in the half, Luke Berry found Harry Cornick with a well-timed ball down the right and he crossed perfectly for James Collins, but from six-yards out, the striker’s effort cannoned off the crossbar and Watford managed to clear.
The hosts took the ball straight up the other end with Ken Sema and he picked out Pedro with a ball into the box, whose shot deflected off Sonny Bradley and past Sluga in the 35th minute.
Watford could have doubled their lead early on in the second half if it wasn’t for some fantastic defending from the Hatters.
Cleverley found space in the middle and picked out Pedro, who flicked first time around the corner for James Garner. Sluga saved the Man United loanee’s effort and birthday boy Martin Cranie blocked Pedro’s effort from the rebound.
Substitute Jordan Clark slipped Collins into the penalty area and the striker made space for himself with a neat cut-back, but his left-footed shot intended for the top corner was too high.
Sluga was alert deep into the second period to save well from Tom Dele-Bashiru, tipping the midfielder’s well-struck effort around the post.
The Hatters continued their quest to find an equaliser and Berry connected well on the volley from the edge of the box, but his shot went over the bar.
Despite late pressure during the five added minutes, Town couldn’t force an opening and suffered a first league defeat of the season.
The Hatters will look to get back to winning ways when they welcome Wycombe Wanderers to Kenilworth Road next Saturday.
Watford: Foster, Ngakia, Kabasele, Cathcart, Wilmot, Sema; Chalobah (Dele-Bashiru 63), Garner, Cleverley (C); Pedro (Deeney 89), Sarr (Quina 90+2).
Subs not used: Bachmann, Dawson, Femenia, Murray.
Goals: Pedro (35)
Town: Sluga, Cranie, Pearson, Bradley (C), Norrington-Davies; Tunnicliffe (LuaLua 78), Berry, Mpanzu, Lee (Clark 58); Cornick, Collins (Hylton 71).
Subs not used: Shea, Moncur, Lockyer, Kioso.
Yellows: Pearson, Norrington-Davies
Referee: John Brooks