The young Canaries' four-game unbeaten run in the FA Premier Academy League came to an end after a late winner from the Saints secured the points at Colney.
Things started well for City, with Jason Dobbs giving Ricky Martin's side a 1-0 lead after just four minutes, but Joe Curtis levelled with a follow-up to Jake Sinclair's penalty 10 minutes later.
Sinclair then sealed the victory for the Saints in stoppage time, getting onto the end of a high ball into the box to make it 2-1.
Academy manager Martin told the club's official website: 'It was disappointing today and in the end the result wasn't good. I didn't feel the performances of the past few weeks were there today, but we'll pick ourselves up. The boys will need to react because we've a tough game against Fulham coming up next.'
• Norwich City Under-18: Matthews, Florence, Toffolo, Clunan, McFadden, McKenzie, Peacock, Dobbs, Howard, McGeehan, Jacob Murphy.
• Southampton Under-18: Johns, Stephens, Turnbull, Mugabi, O'Sullivan, McCarthy, Reed, Gape, Curtis, Ward-Baptiste, Sinclair.
• City's FA Youth Cup third round tie at home to Oldham or Macclesfield will be played at Carrow Road on Tuesday, December 13.
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