Despite going ahead through Christian Theoharous, Victory was downed after second-half goals from Joshua Romein and Dominic Swinton.
Victory head coach Gareth Naven lamented his side's lapses in crucial moments at Morshead Park Stadium.
"It was a good goal by Theoharous, we were in control of the game, developed a lot of opportunities to score more goals, and it's three points we lost," he said.
"In crucial moments we're a bit like butter at times. It annoys me because they put a lot of effort in getting some rewards in possession, but out of possession at times (is lacking) and not being ready or sharp enough in set-pieces, weaknesses of our youth players.
"They've got to get sharper and smarter in regards to managing the game, especially in set-pieces. You've got to be ready for anything."
Naven added: "We're giving soft goals away. We need to understand that we've got to prevent these things because they're doing so well in possession.
"You've got to do well in every moment of the game and a little frustrated that we lost tonight, especially when there were opportunities there to take the three points."
Victory made a bright start and took a 17th-minute lead through Theoharous, whose effort went in via the crossbar.
The hosts equalised immediately after half-time, however, as Romein levelled proceedings from distance.
Ballarat found a late winner as Swinton headed in a corner, seeing Victory fall to a second straight loss.
Earlier, Victory's under-20s suffered their third loss of the season, beaten 3-2 by Ballarat City.
Victory is back at home in Round 15, hosting Brunswick City at Epping Stadium on Saturday, May 20.
PlayStation 4 NPL2 West 2017 Round 14
Ballarat City 2 (Joshua Romein 47', Dominic Swinton 89')
Melbourne Victory 1 (Christian Theoharous 17')