Town had more than enough chances to have finished the pre-season campaign on a winning note but were undone by two goals in three minutes in the second-half.
Daryl Murphy, who could have bagged a hat-trick, put Blues ahead on the hour with a close range header.
Murphy and David McGoldrick went close to a second but on 72 minutes, Royale Union Saint-Gilloise were level through Mathias Fixelles and then edged in front when Nicolas Rajsel found the net with a low drive.
Roland Lamah got a second chance to impress Mick McCarthy, the Belgium international handed a start after playing for Blues in the goalless draw at Charlton on Tuesday.
Murphy was inches away from converting Christophe Berra’s cross as Town opened up the Union SG defence on nine minutes, then Lamah fizzed a shot just over from 30 yards.
RUSG were tidy on the ball throughout, Rajsel denied by an excellent block from Luke Chambers as the visitors threatened on the break.
Murphy headed against the bar from Freddie Sears’ cross, with ‘keeper Anthony Sadin up quickly to deny Teddy Bishop with an excellent save when the midfielder looked certain to score from the rebound.
Charles Morren pulled his shot wide, then at the other end Murphy cut inside but had his shot blocked, Kevin Bru sending a 35 yard looping drive just over.
Murphy saw another header from Jonas Knudsen’s cross stick to Sadin’s gloves.
Berra’s header from Bru’s corner was flicked goalwards by Luke Chambers and hacked off the line as Town went close again just before the break.
Tommy Smith replaced Berra at half-time, McGoldrick on for Bishop soon after, with Andre Dozzell the next to join the action as Lamah made way.
Town eventually found the net on the hour, Murphy making no mistake with a header from a Bru corner.
Blues could have added to the scoreline before Union SG equalised out of nothing. The visitors countered from a Town corner and Fixelles broke clear to finish with style on 72 minutes.
Three minutes later, Union SG, backed by a vocal following, added a second goal through Rajsel from the edge of the box.
McGoldrick and Adam Webster both went close in the last minute but Town couldn’t find an equaliser in the last game before the season gets underway against Barnsley next weekend.
Town: Bialkowski, Chambers, Webster, Berra (Smith 46), Knudsen, Bishop (McGoldrick 52), Bru, Skuse, Lamah (Dozzell 58), Murphy, Sears.