Heading into the game just five points off the top three and boosted by the loan capture of Alessio Cerci from Atletico Madrid, Filippo Inzaghi's Milan hoped to kick-start their push towards a potential UEFA Champions League berth in their opening Serie A match of 2015.
However, Milan were instead frustrated by a determined Sassuolo side that fought back brilliantly to claim a surprise victory.
Midfielder Andrea Poli opened the scoring in the eighth minute from close range, but the hosts were never able to take full control of the game and Nicola Sansone levelled for Eusebio Di Francesco's men shortly before the half-hour mark with a powerful low strike.
Poli broke the deadlock with the first real chance of the game, his shot possessing just enough power to beat Andrea Consigli after Stephan El Shaarawy had diverted the ball into his path from Giacomo Bonaventura's low right-wing cross.
But Milan failed to assert their authority on the game following the opener and were duly punished as Sansone made it 1-1.
The former Torino man almost made an immediate impact as he sprang the Sassuolo offside trap, but Consigli was quickest to meet the ball forward.
The 23-year-old met Berardi's corner with a stunning first-time finish from 10 yards that left Milan keeper Diego Lopez with no chance.
Inzaghi's side continued to throw bodies forward in search of a late equaliser, yet Sassuolo's resolute defence hung on to ensure a win that moves them within two points of Milan and should give their players added confidence ahead of next week's Coppa Italia tie between the two sides at San Siro.
