It was the first defeat in seven Evo-Stik League Division One South games for Graham Drury's side who were second best to a fired-up Sports team.
The Stamford manager admitted afterwards that his side had been beaten by the better team on the day as a goal in each half from Lewis Hilliard and Mark Jones saw the Daniels drop to seventh place and outside of the play-off places.
Drury said: "We looked bright and sharp in the first 15 minutes and created a couple of chances so I thought we were in for a good afternoon.
"But all credit to Peterborough Sports, they outworked us and outbattled us. They bossed us and we were carrying too many players."
With injured full-back Ben George expected to be sidelined for the foreseeable future and Joe Burgess still not fit, Stamford's plans suffered a further setback with Mike Armstrong unable to start due to illness.
Centre-halves Delroy Gordon and Henry Eze both had to play despite not being fully fit as Stamford's defensive resources with stretched to the limit.
Drury added: "It's not an excuse for the performance, but Henry struggles to play two games in a short space of time while Delroy wasn't really fit enough to put a pair of football boots on.
"His ankle ballooned after a tackle late in Saturday's game, but I thought we would still have enough going forward to hurt the opposition.
"But we kept playing the ball down the middle which played right into Peterborough Sports' hands instead of moving it down the sides.
"They deserved to beat us. We can't always be at our best though and we know need to show how big our character is to turn it around again on Saturday."
Stamford were quickly out of the traps with Liam Adams bringing out a decent early save from home goalkeeper Dan George who then smothered a header from Bradley Wells.
George palmed away a Jake Duffy free-kick and then a good run and cross from Jordan Smith picked out Adams whose low shot was again saved by George.
The early goal that Stamford needed to deflate their pumped-up hosts failed to materialise though and Sports weathered the storm as they gradually worked their way into the contest.
Stamford goalkeeper Dan Haystead had to be alert to dash off his line to thwart Avelino Vieira before the hosts were awarded a 23rd minute penalty.
Duffy was adjudged to have handled as a cross was driven into the box and, despite the Daniels' protests, Hilliard kept his composure to stroke home the resultant spot kick.
While the penalty award might have been slightly generous, the hosts did have a more legitimate claim turned down moments later when ex-Daniel Josh Moreman tangled with Eze in the box and was sent tumbling after getting in front of the Stamford defender.
Haystead had to turn away an effort from Jordan MacLeod before Sports struck the upright through Vieira's back-post header from a Dan Lawlor centre as the hosts finished the half on top.
Stamford looked for an early reply after the break and had a hand-ball penalty shout turned down when Duffy's effort was charged down.
Wells then smacked the home upright as he turned a Duffy corner goalwards before Sports were awarded a free-kick on the edge of the Stamford box, but Haystead was well positioned to collect Liam Marshall's effort.
The home side doubled their lead with 13 minutes remaining as Hilliard made good ground down the right before picking out Mark Jones with his centre and the Sports striker made no mistake with a composed finish past Haystead.
Stamford threw more men forward in their quest to get back into the contest, but the ex-Daniels partnership of Richard Jones and Marshall at the heart of the Sports defence proved more than equal to everything launched at them.
Saturday's lasp-gasp goalscorer Eze came close to repeating the feat when he turned a Wells cross goalwards but George was able to scamper across and save on the line as Sports held out for a vital victory to move off the foot of the table while denting the Daniels' promotion hopes.
# | Team | Pl | Pts |
1. | Basford United | 42 | 100 |
2. | Alvechurch | 42 | 85 |
3. | Frickley Athletic | 42 | 82 |
4. | Bedworth United | 42 | 74 |
5. | Chasetown | 42 | 73 |
6. | Stamford | 42 | 71 |
7. | Leek Town | 42 | 68 |