Christophe Galtier's side could have gone two points clear at the top of the league with victory at Stade Geoffroy-Guichard, but they threw away an early lead as Toulouse won for the first time this season.
Midfielder Romain Hamouma gave Saint-Etienne the early lead after just 18 minutes, continuing his rich vein of form.
The goal was Hamouma's third in as many Ligue 1 fixtures and the hosts an advantage that they carried into half-time.
But Toulouse, who began the match in the relegation zone, dug deep after the break, with a goal from Dane Martin Braithwaite levelling proceedings in the 63rd minute.
And they scored again to take all three points as Issiaga Sylla netted the winner with just 15 minutes to play.
Toulouse climbed to 15th thanks to their unlikely victory while Saint-Etienne's home defeat was their first in Ligue 1 this year.
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