Two goals in the final five minutes condemned Everton Under-23s to a 2-1 defeat in their final Group F Premier League Cup clash at Holmes Park.
The young Blues, who went into the contest having already secured qualification into the knockout phase of the competition, looked to be on course to leapfrog their opponents and take top spot in the group when Alex Denny put them ahead with 20 minutes remaining.
But Leicester levelled on 84 minutes before netting the winner from the spot moments later after Antony Evans was penalised for handball in the area.
Boss David Unsworth made a handful of changes to his Everton side, with Con Ouzounidis making his first start for the Under-23s after appearing on the bench for recent fixtures against Derby County and Barnsley. And the centre-back formed a quick and impressive partnership with Lewis Gibson.
Evans, who was captaining the side on a bitterly cold night in the East Midlands, had the first real chance for either side with a free-kick on the edge of the area that Conor Grant had won but he could not keep his strike down.
Shayne Lavery took his place as the main central striker with Jose Baxter in just behind him and, in a first half of few chances, it was Baxter who created an opportunity for Grant to unleash a shot. His left-footed effort was blocked early which took the sting out of the shot as Leicester keeper Max Bramley saved.
As the half wore on, Leicester started to create chances of their own with the best falling to Layton Ndukwu. The winger rifled in a shot that looked to be nestling in the far corner only for a brave block by Gibson to ensure it was goalless at the break.
The second half started was a much livelier affair as both sides had chances. Luke Garbutt found space just wide of the 18-yard box after flying down the left-hand side and whipping in a fierce ball that evaded everyone in a grey shirt.
On the hour mark, Unsworth was the first manager to make changes as Bassala Sambou, Anthony Gordon and Daniel Bramall came on for Garbutt, Beni Baningime and Lavery.
Ten minutes later, the substitutions worked as Gordon dipped and weaved in between two Leicester defenders before passing to Baxter who laid the ball off for Denny to smash a snapshot into the bottom corner to give the Blues the lead.
However, as the game reached a close, Everton’s hard work was undone when Kairo Edwards-John latched onto a knockdown to tap the ball past Mateusz Hewelt to make it 1-1.
And two minutes later it got worse as Evans handled in the box for the referee to award the penalty. Leicester captain Hamza Choudhury stepped up to take the spot-kick and sent Hewelt the wrong way to give Leicester all three points, ensuring they finished top of Group F.