Shaun MacDonald grabbed the only goal of the game as Yeovil dealt another blow to MK Dons' hopes of promotion.
The visitors, nine points off sixth spot at kick-off, started brightly and Jermaine Easter forced a smart stop from Alex McCarthy in the home goal.
But it was Yeovil who took the lead when MacDonald smashed in a 20-yarder.
Dons keeper Willy Gueret kept his side in it with saves from JP Kalala and Arron Davies, but the visitors could not break through despite a late rally.
Yeovil manager Terry Skiverton told BBC Somerset:
"As a team and as a unit, I thought we were very strong and really solid against a team near the top end of the table. I thought we were excellent today.
"So that was a massive win for us, and I'm really pleased and proud of the players for the shift that they put in."
MK Dons assistant manager Karl Robinson told BBC Three Counties Radio: "We were completely and utterly robbed.
"In the first half they didn't have a shot at us. In the second half we had something in the region of 14 or 15 shots. Possession will be somewhere in the region of 65%. Sometimes it's just not your day.
"If you watched that game from a professional viewing point, all the components of the game you are looking for, desire, willingness to go and win tackles, get crosses in, it all came out."
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