Wayne Evans (left) prepares to tackle Ulster's Kieron Dawson
Ulster (7) 14
Tries: Dawson, Humphreys Cons: Schifcofske (2)
Dragons (9) 16
Try : Smith Con : Arlidge Pens: Arlidge (3)
Ulster slid to the bottom of the Magners League table after producing a dismal display against the Dragons.
Kieron Dawson's try helped Ulster lead 7-0 as they dominated the early stages.
The Dragons had very little possession but James Arlidge punished Ulster indiscipline by slotting three penalties before the break.
After Ulster had wasted further chances, Ashley Smith's try extended the Dragons' lead and they held on to win despite Ian Humphreys' late try.
Ulster suffered their third consecutive defeat while the Dragons, thumped by Munster last time out, earned their first win of the campaign.
The home side dominated the opening exchanges, going close on a couple of occasions before former London Irish flanker Dawson opened the scoring on 11 minutes.
Dawson went around the blindside of the line-out to touch down under the posts and Australian full-back Clinton Schifcofske converted.
Arlidge opened the visitors' account with a penalty after 19 minutes, awarded following an infringement by Ulster at the line-out.
The Dragons fly-half then cut Ulster's lead to a point after 30 minutes when he slotted over his second penalty from just inside the home side's half.
Ulster could not turn their pressure into points and allowed the Dragons to take a 9-7 lead at the interval when Arlidge kicked a third successful penalty in first-half stoppage time.
Former Ulster number eight Grant Webb was unlucky not to extend his new club's lead when he went nearly the full length of the pitch before being tackled by Timoci Nagusa.
The Dragons had left winger Richard Fussell sin-binned on 50 minutes and Ulster should have capitalised when Andrew Trimble broke out of his own half but was forced into touch near the try-line.
Against the run of play the Dragons broke out of defence and increased their lead with a try from Smith after Nagusa had allowed Fussell's kick to bounce.
Replacement Humphreys crossed for Ulster with four minutes left after a sustained period of pressure.
And despite pressing desperately in the closing stages the hosts had to be content with a losing bonus point.
Ulster: C Schifcofske; A Trimble, D Cave, R Dewey, T Nagusa; N O'Connor, I Boss; T Court, R Best, capt, B Botha, R Caldwell, E O'Donoghue, M McCullough, K Dawson, R Diack.
Replacements: N Brady, J Fitzpatrick, C Del Fava, T Anderson, C Willis, I Humphreys, B Cunningham.
Dragons: P Dollman; G Wyatt, R Sidey, A Smith, R Fussell; J Arlidge, W Evans; A Black, T Willis (capt), R M Thomas, A Jones, L Charteris, J Bearman, R Parks, G Webb.
Replacements: S Jones, H Gustafson, A Brown, J Ringer, R Gomer Davies, J Tovey, T Isaacs.
Referee: Andy Macpherson (SRU)