Udinese claimed a 2-1 win over a disappointing Milan side to leave Filippo Inzaghi's side's hopes of qualifying for Europe looking bleak.
Milan's slim hopes of qualification for the UEFA Europa League were further dented by a 2-1 Serie A defeat to Udinese on Saturday.
Following what has so far been a disappointing season for Filippo Inzaghi's men, Milan headed to the Stadio Friuli hoping to make it five games unbeaten and narrow the gap to sixth-placed Fiorentina to just three points.
However, Milan were on the back foot for the majority of a disappointing spectacle as Udinese claimed only their ninth win of the campaign.
Giampiero Pinzi opened the scoring for the hosts, the midfielder rifling home from Antonio Di Natale's corner in the 58th minute.
That goal failed to provoke a response from Milan and Udinese's lead was doubled by Emmanuel Agyemang-Badu, who turned in from point-blank range 15 minutes from time.
Giampaolo Pazzini pulled one back late on, yet that proved to be nothing more than a consolation as Milan slipped to a loss that keeps them six points adrift of Fiorentina with six games remaining.
Udinese had the better of a low-key first half but struggled to create too many clear-cut chances as defences dominated early proceedings.
Agyemang-Badu forced Diego Lopez to turn a shot round the post in the third minute and headed narrowly wide of the right-hand upright half an hour later.
But the best opportunity of the opening 45 minutes fell to Silvan Widmer as he diverted a corner just off target before Guilherme lashed a volley over the crossbar from 25 yards out.
Luca Antonelli then had the ball in the net for Milan in the final minute of the half, however, the referee's whistle had already been blown for a push on Widmer in the build-up.
Milan's Gabriel Paletta was withdrawn and replaced by Adil Rami at half-time because of an injury, and the visitors' defence was threatened again seven minutes after the restart as Di Natale flashed an effort over.
Udinese finally made the breakthrough when Pinzi controlled Di Natale's delivery before steadying himself and powering the ball into the bottom-left corner.
Andrea Stramaccioni's men refused to sit back and protect their lead and were rewarded for showing attacking intent as Agyemang-Badu converted from Guilherme's cross after Lopez only managed to parry a fierce Di Natale strike.
Pazzini's downward header gave Milan some hope of a dramatic late comeback, but Udinese deservedly held firm on a day that provided another demonstration of how far the 18-time champions have fallen.