Ten-man Stenhousemuir dominated but were hit by two late goals after referee Eddie Smith went card happy.
The Warriors had five players booked and David McInally ordered off in a bad- tempered match. Stenhousemuir's intricate passing repeatedly carved open the Fifers, and Joe Savage could have had at least a hat-trick by half-time.
He was denied by Scott Morrison after eight minutes, and then the striker nodded a Keith Knox cross over the bar shortly afterwards.
After 19 minutes he showed great trickery to beat two defenders, but his angled shot just missed the corner of the net.
Savage was again denied when he met Martin Lauchlan's overhead kick and Morrison somehow blocked his downward header.
With the wind at their back, Fife finally created some changes and Kris Brash let fly in the 50th minute but his shot climbed over the bar. After producing a series of top saves, Morrison almost gifted the Warriors a goal after he dropped McInally's harmless high ball.
McInally was then red carded after 64 minutes. He did catch Sean Paliczka with a late tackle, but the referee's actions seem harsh considering the player hadn't already been booked. The 10 men continued to press, and Lee Collins forced Morrison into a good save after 70 minutes.
East Fife made the breakthrough after 78 minutes when Craig Lumsden controlled Brash's cross and hammered the ball into the net.
With just two minutes left Brian Fairbairn was hauled down by John-Paul McBride, and Fairbairn took the kick himself and beat the keeper.