League One leaders Leicester City's club record 23-match unbeaten league run came to an end at Prenton Park.
Tranmere took an early second-half lead when Bas Savage set up Antony Kay for a fine strike from the corner of the box.
The home side continued to hold the upper hand and sealed the points with a penalty seven minutes from time.
Savage was brought down by Chris Powell and Steve Jennings found the right-hand corner with the spot-kick to boost Tranmere's play-off hopes.
Tranmere: Coyne, Shotton, Chorley, Goodison, Taylor, Mayor, Kay, Jennings, Barnett, Savage, Gornell. Subs Not Used: Achterberg, Edds, Sonko, Cresswell, Shuker.
Goals: Kay 47, Jennings 83 pen.
Leicester:
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Stockdale, Gilbert, Morrison, Hobbs, Mattock (Gradel 60), Cleverley, Oakley, Andy King (Hayles 72), Powell, Howard, Fryatt. Subs Not Used: Pentney, Edworthy, Berner.
Att: 6,032
Ref: David Foster (Tyne & Wear).
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