Manchester United were on course to register their second victory in the season when a Robin Van Persie header and an audacious chip from Angel di Maria put them ahead.
Leonardo Ulloa’s header reduced the deficit before Ander Herrera’s goal extended United’s lead.
Leicester fought their way back through a David Nugent penalty and Esteban Cambiasso equalised before Jamie Vardie and an Ulloa penalty secured the win.
United, though packed with a lot of attacking punch, were very weak at the back and Leicester made them pay. Louis Van Gaal will have to do a lot of reorganising with two of his defenders, Danny Evans and Tyler Blackett, to miss their next game against West Ham.
Blackett was sent off after committing a foul on Vardy, which led to Ulloa’s spot kick. Van Gaal also has to see the extent of Danny Evan’s injury who had to be taken out the game after 30 minutes.
A controversial second-half penalty was the turning point of the match, Referee Mark Clattenburg allowed Vardy to barge into Rafael just outside the box but, as the two players battled on, the United defender brought down the striker and the official pointed towards the spot.
United’s players protested but Nugent converted his spot kick to earn his 50th league goal for the club down the middle.
Less than two minutes later, former Inter Milan midfielder Cambiasso struck an unexpected and dramatic equalizer low into the net.
The home fans were buoyant, Leicester were rejuvenated and United were fading. United’s confidence continued to dwindle, Ritchie De Laet dispossessed substitute Juan Mata on the right and found teammate Vardy, who calmly converted his first Premier League goal.
When United conceded a second penalty and Ulloa stepped up to score his fifth league goal and spark wild celebrations.
For United’s first goal, Van Persie was presented with a routine header – which went in off Liam Moore – for his first league goal of the season thanks to Falcao’s perfect cross from the left.
The best was yet to come, however, as Di Maria lit up the half with an extraordinary second goal. The British-record signing collected the ball in his own half and sucked in two Leicester players before finding Wayne Rooney on the left. The captain’s return ball set the Argentine free inside the box and he executed a memorable chip which beat Schmeichel.
Leicester are currently in seventh position with 8 points while United sit in twelfth position with 5 points.