The Seagulls had enjoyed a dream start to their campaign following last season's promotion from League One having dropped just two points from their opening six games.
However, taking anything from the King Power Stadium proved a bridge too far as Yuki Abe's solitary strike earned Leicester a win which, combined with Middlesbrough's win at Crystal Palace, drops Gus Poyet's men to second.
Brighton did have chances to claim a share of the spoils, with Craig Mackail-Smith missing a golden opportunity, but their hopes evaporated when Marcos Painter was sent off late on.
The victory provided a boost for former England manager Sven Goran-Eriksson, who is under pressure to deliver significant returns from the £15million investment on new players over the summer.
The Foxes had not enjoyed the start to the season they were hoping for after making several high-profile acquisitions over the summer.
Indeed, they sat 10th going into the encounter while the visitors were buoyed by being at the top of the tree.
The form book had little impact on the opening exchanges, though, as the home side dominated.
Eriksson's men should have got the reward their adventure deserved in the 20th minute when Lee Peltier saw his effort chalked off.
Darius Vassell, who was causing problems aplenty alongside strike partner Jermaine Beckford, drew a poor challenge before the ball broke to Peltier, who fired home.
However, referee Graham Scott had already blown for the free-kick, much to the frustration of the home support.
But that annoyance did not half the Leicester onslaught, with Andy King and Sol Bamba being denied by impressive Casper Ankergren's saves prior to half-time.
Picking up where they left off, the Foxes flew out of the blocks after the interval and took just 45 seconds to move into a well-deserved lead through Abe.
Vassell was the orchestrator, cleverly working an opening to send in a lovely left-wing cross, allowing Abe to beat Ankergren with a thumping header.
The visitors tried desperately to get back into the game thereafter and would have but for an incredible miss from Mackail-Smith, who volleyed over from just three yards.
Brighton pushing forward with increasing frequency left gaps to be exploited, though, with the pace of Beckford, in particular, causing problems.
That almost proved fruitful for the Foxes as a break from the former Evertons striker ended with the ball finding Gelson Fernandes, who hit just over.
Yet Poyet's side were continuing to pose more than their fair share of problems as Harley saw two goal-bound efforts blocked by Peltier and Matt Mills.
However, their hopes of getting back into the game all-but ended in the 80th minute as Painter picked up second yellow card for a blatant handball.