The 2 goal lead seem to spark Birmingham City into life and no sooner after the youngesters took a two goal lead it was halved when Matt Tootle scored an own goal then on the 52nd minuted Ashley Sammons headed in past keeper Daniel Platt.
Then in the 68th minute the Blues took the lead where Robert Gradwell slotted in after Platt had parried a free kick.
Youth manager Neil Critchely told the Stoke Sentinal "The lads are gutted. It was a very quiet dressing room after the match.
"To be 2-0 up and then concede two goals in six minutes is disappointing.
"We should have held the lead for longer and it was sloppy defending that let Birmingham back into the game. We showed good spirit, but it was just not our night."
Crewe Alex: Platt, Tootle, Peel Davis, Dunkley, Mellor, Freeman, Lund, Titchner, Marshall, Ager (Stephens 77).
Subs Not used: Rowntree, Davenport, Oswell, O'Sullivan.