Four days on from victory over Leeds United on home soil, the Foxes youngsters were in PL2 action once more, this time up against the Toffees in Southport.
And the visitors got off to the perfect start on 20 minutes - Silko Thomas continuing his goalscoring form by converting a penalty, his third goal this week.
It took just three minutes for the hosts to level, however, Reece Welch restoring parity at The BIG HELP Stadium. It was then Everton's turn to seize the advantage, courtesy of Charlie Whitaker's strike just before the half-hour mark.
Into the second half and Sammy Braybrooke was introduced from the bench, making his first appearance since suffering an ACL injury in January 2023.
Another City substitute, Jayden Joseph, then found the equaliser, ahead of Henry Cartwright scoring Leicester's second penalty of the contest with 10 to play.
Unable to hold on to that 3-2 lead, Whitaker netted his second, also from the penalty spot, to set up a grandstand finish. And it was the home side who managed to grab a winner in the closing stages - Jenson Metcalfe striking with two minutes of normal time to play.
The defeat leaves Leicester 23rd in the 26-team table, missing the chance to leapfrog Everton in the PL2 standings. Moving on, a Midlands derby against Aston Villa awaits next Friday at Bodymoor Heath Training Ground (7pm GMT kick-off).
The details...
City: Ward; Cover, Grist, Wormleighton (c), Lindsay (Joseph 46'); Raikhy, Cartwright, Ewing (Braybrooke 69'); Briggs (Popov 46'), Thomas (Pennant 58'), Richards.
Unused sub: Doherty.
Goals: Thomas 20' (p), Joseph 66', Cartwright 80' (p).
Image credit: Everton FC.