Following a 5-0 reverse against Arsenal on Tuesday, which ended a three-game unbeaten run in all competitions, the young Foxes welcomed the Seagulls to Leicester last weekend.
However, they were two goals behind after 55 minutes, following Ben Wilson's penalty and a Laurent Tolaj strike, which both came after the half-time interval.
Johnson Gyamfi did narrow the arrears with 14 minutes to play, latching on to Terrell Pennant's assist, but City were unable to complete a stirring comeback in Premier League U18 South.
As a result, Leicester's youngsters are now seventh in the league, with 20 points from 15 matches, and just five behind fourth-placed West Ham United.
Next up, the young Foxes welcome Watford to King Power Stadium for an exciting FA Youth Cup Quarter-Final tie on Wednesday evening (7pm GMT kick-off).
Last year, they were knocked out on penalties at Nottingham Forest in the fourth round, but have so far this season defeated Fulham, Crewe Alexandra and Bolton Wanderers.
In 2014/15, though, an Under-18s squad including Ben Chilwell, Harvey Barnes and Hamza Choudhury overcame Wigan Athletic, Chesterfield, Southampton and Birmingham City to reach the semi-finals.
Don’t miss out on your chance to see the next generation of Foxes stars by clicking HERE to secure tickets at King Power Stadium on Wednesday!
The details...
City: Bosworth, Husek, Kranthove, L. Thomas (c), Elewa-Ikpaku, James, J. Gyamfi, Tavares, Ewing, Pennant, Russ (Myring 65')
Subs not used: Stolarczyk, Sams, Barrett, Murch
Goal: J. Gyamfi 76'