Former Milan striker Alberto Gilardino denied 10-man Inter the chance to go back top of Serie A, securing Palermo a 1-1 draw against Roberto Mancini's men.
After a slow first half, the game burst into life after the break and Ivan Perisic's goal, a tap-in from substitute Jonathan Biabiany's cross, was well deserved as Inter got on top.
But the lead lasted just six minutes. Inter failed to clear and Franco Vazquez hit a fierce cross-shot that was diverted home by an unwitting Gilardino from close range.
Fredy Guarin came closest to snatching the points for Inter but Palermo goalkeeper Stefano Sorrentino was in fine form to deny him a winning goal.
Jeison Murillo's red card for two bookable offences halted Inter's momentum and ensured their poor record at Palermo - where they have not won since 2010 - continued.
The hosts started in confident mood, although they could not force the early goal their dominance deserved.
Gilardino headed a fine cross from Achraf Lazaar just wide and Samir Handanovic was soon called into action, getting down to block a cross with the former Italy forward waiting for a tap-in.
However, Inter worked their way back into the contest and Mauro Icardi had an effort blocked before a corner eluded three Nerazzurri players in the box with Sorrentino nowhere.
Sorrentino again kept the scores level early in the second half, plunging down to his right to keep out Stevan Jovetic's free-kick.
Palermo's early failure to take their chances came back to haunt them as Perisic struck.
Biabiany had only been on the pitch a few minutes, but he crossed low for Croatia attacker Perisic to tap in after a lofted ball opened Palermo up.
The hosts were soon level, Gilardino tucking his eighth Serie A goal against Inter when he was alert to divert in a fired cross by Vazquez.
The game was wide open and Palermo almost made it 2-1 shortly after, but Andrea Rispoli's shot deflected just over the bar, with Guarin sharp at the other end to tip Guarin's deflected drive over the crossbar.
Inter's chances of forcing a winner took a blow when Murillo was sent off for a second yellow card after stopping Vazquez in full flow.
And Sorrentino was the hero at the death, somehow denying Biabiany when he looked certain to score.
The Nerazzurri have struggled in front of goal all season, scoring just eight goals from eight games prior to their trip to Palermo, and they could not find the winning goal that would have taken them back to Serie A's summit.
