Liam Buchanan earned Alloa a precious point with his 15th goal of the season.
Ben Gordon's emphatic header lit up a poor first-half but Queens' Derek Lyle levelled from the spot after Danny Carmichael was tripped.
The visitors took the lead two minutes later when Mark Millar finished superbly from Carmichael's cross.
Buchanan's low shot squeezed in at the near post before Queens goalscorer Millar received a red card for head-butting Michael Doyle.
It means the fourth-placed Doonhamers have not yet secured their promotion play-off spot - finding themselves five points ahead of Scottish Cup finalists Falkirk with two games to play.
Alloa still occupy the relegation play-off position in ninth but moved one point closer to Cowdenbeath, who they face on the final day at the Indodrill stadium.
So Wasps boss Danny Lennon could potentially relegate the team where he cut his teeth in management, and it was another Blue Brazil old boy Buchanan who struck to secure the point.
The striker used all his experience to shoot past goalkeeper Zander Clark after a neat pass by Iain Flannigan, who had also delivered the corner for Gordon's header just before half-time which gave Alloa the lead in Clackmannanshire.
But the club from the 'Wee County' were undone after the break by a menacing Carmichael, who twice caused panic in the home defence by scampering down the right-hand side.
On-loan Dundee defender Benedictus felled him to allow Lyle the opportunity to bag a 19th of the season from the penalty spot.
Then a pinpoint cross created the chance of a perfect control and left-foot strike by former Bairn Millar, who got his marching orders later from referee Stephen Finnie for pushing his head into Doyle's.
That was after Buchanan's equaliser, which ensured Queens definitely cannot relax yet, and neither can the Wasps.
Lineup, Bookings (7) & Substitutions (6)
Alloa Athletic
- 01 Gibson
- 17 Doyle Booked
- 04 Gordon
- 14 Benedictus Booked
- 05 Meggatt Booked (Asghar - 79' Booked )
- 07 Cawley
- 10 Holmes Booked
- 08 McCord
- 16 Flannigan (Ferguson - 77' )
- 09 Spence (Chopra - 63' )
- 19 Buchanan
Substitutes
- 02 Tiffoney
- 20 Asghar
- 21 McDowall
- 25 Chopra
- 26 Layne
- 28 Rutherford
- 30 Ferguson
Queen of the South
- 01 Clark
- 14 McKenna
- 04 Dowie
- 05 Durnan Booked
- 03 Holt
- 06 Higgins
- 08 Millar Dismissed
- 15 Paton (Russell - 76' )
- 17 Carmichael
- 10 Reilly (Pickard - 91' )
- 19 Lyle (Smith - 87' )
Substitutes
- 11 Russell
- 20 Atkinson
- 22 Hooper
- 23 Smith
- 24 Smith
- 28 Pickard
- 29 Dickinson