The result was a major scalp for the Major League Soccer side who are currently lying eighth in their Conference and played most of the game with 10 men.
The one consolation for Sir Alex Ferguson was the return of Nani, who played 68 minutes at Arrowhead Stadium in his first outing since suffering a dislocated collarbone before the World Cup.
However, the winger made little impact as United went down to their first tour defeat following wins over Celtic and Philadelphia Union.
Davy Arnaud opened the scoring for the hosts before Dimitar Berbatov levelled from the penalty spot after a challenge which saw the Wizards' Jimmy Conrad sent off.
The hosts quickly responded with Kei Kamara restoring their lead before the break.
United raised the tempo in the second half but they were unable to breach the determined home defence.
United almost went ahead the eighth minute when they were awarded a free-kick following Shavar Thomas' challenge on Berbatov.
After Nani saw his initial effort come back off the wall, Paul Scholes reacted quickest to the loose ball but his effort was kept out by Jimmy Nielsen's superb parry.
United goalkeeper Ben Amos was making his first appearance of the tour but found himself picking the ball out of the net after 11 minutes.
Arnaud latched on to a through ball from Kamara after being played onside by Rafael and kept a cool head to drill home into the corner.
United's defence was almost breached again in the 23rd minute when Michael Harrington delivered a cross from the right but former Crystal Palace midfielder Ryan Smith scuffed his effort with just Amos to beat.
Nani then went on a surging run but Nielsen blocked his shot, before Ryan Giggs was booked after a shoving match with Harrington.
United drew level in the 41st minute when Berbatov equalised from the spot with a cheeky finish. The Bulgarian won the kick himself after being bundled over by Conrad, who saw red for the challenge.
The 10-man Wizards were not deterred and regained the lead a minute later when Kamara got on the end of a cross from Smith to head home, although replays could not conclusively prove that the whole ball had crossed the line.
United set the tempo in the second half and Mame Biram Diouf saw a shot saved by substitute goalkeeper Eric Kronberg in the 46th minute.
Darron Gibson then sent an effort high over the bar following a Giggs free-kick.
It was a frustrating time for United and Scholes went close in the 61st minute but again the Wizards held firm.
United stepped up the pressure in the final minutes and the last chance came and went when Tom Cleverley released fellow substitute Danny Welbeck but he fired just wide.