Sassuolo lead an out-of-sorts AC Milan side 2-1 at half time thanks to two goals from their talismanic forward Domenico Berardi.
Eusebio Di Francesco's side took the lead in comical circumstances when Diego Lopez fumbled a long-range Berardi strike.
The Milan goalkeeper appeared to recover and prevent the ball from crossing the line, but the goal was given by referee Marco Guida on the advice of his assistant, much to Lopez's amazement.
Things could have got even worse for Milan when Berardi played in Saphir Taider just minutes later, but the Algerian midfielder's near post shot was blocked by Ignazio Abate.
However, Sassuolo didn't have to wait long to double their lead as Berardi latched on to Simone Missiroli's long ball forward and drilled a low effort beyond Lopez and inside the far post just after the half-hour mark.
Milan hit back instantly through Giacomo Bonaventura's fifth goal of the season when he skipped his way beyond two Sassuolo defenders and into the box before toe-poking an effort inside the post.
Andrea Consigli then had to be at his best to keep out a curling Keisuke Honda strike from the edge of the box as Milan forced their way back into the game, but Sassuolo held on to lead at the break.
