Brighton booked their place in the FA Cup fourth round after substitute Glenn Murray scored a contentious winner in the first game a video assistant referee was used in a competitive match in English football.
Referee Andre Marriner did not see the need to refer to VAR as Murray steered the ball in from close range despite Palace's calls for handball (87) after Bakary Sako (69) had cancelled out Dale Stephens' first-half opener (25).
Yohan Cabaye led the protests at the full-time whistle with replays showing the ball may have brushed Murray's arm after hitting his knee on its way into the net.
Brighton: Krul (6), Schelotto (7), Hunemeier (7), Goldson (6), Bong (6), March (7), Stephens (7), Kayal (7), Izquierdo (6), Brown (5), Hemed (6).
Subs: Propper (6), Baldock (6), Murray (6)
Crystal Palace: Hennessey (6), Fosu-Mensah (7), Kelly (6), Delaney (6), Schlupp (5), Van Aanholt (6), Riedewald (6), McArthur (6), Cabaye (7), Townsend (6), Sako (7).
Subs: Souare (6), Kaikai (6)
Man of the match: Beram Kayal
The Seagulls progress to face Championship side Middlesbrough at the Riverside in the next round.
Brighton made eight changes to the side that drew with Bournemouth in their last Premier League outing, but they were forced into an early substitution as Izzy Brown jarred his knee in a challenge with Jeffrey Schlupp.
Schlupp was also forced off in an uneventful opening, but it was Chris Hughton's side who deservedly took advantage of Palace's lack of ambition going forward as captain Stephens fired the hosts ahead.
The former Charlton midfielder collected Ezequiel Schelotto pass on the right and glided beyond Cabaye before firing past Wayne Hennessey at his near post with no sign of a Palace challenge.
Brighton made eight changes. Tim Krul replaced Mathew Ryan in goal, while Uwe Hünemeier, Connor Goldson, Gaetan Bong, Solly March, Beram Kayal, Isaiah Brown and Tomer Hemed also started. Crystal Palace made four changes as Damien Delaney, Jairo Riedewald, Patrick van Aanholt and Bakary Sako replaced James Tomkins, Luka Milivojevic, Wilfried Zaha and Christian Benteke.
Palace, who were without Wilfried Zaha and Christian Benteke, had lacked an attacking threat, but Roy Hodgson brought on Sullay Kaikai for Andros Townsend at the interval to provide Sako with greater support. And the visitors were rewarded as Sako wriggled free from Davy Propper to fire an unstoppable shot in off the post with 21 minutes remaining.
Brighton came close to regaining their lead as Sam Baldock struck the post from Solly March's cross before Beram Kayal blazed over when well placed on the edge of the box.
It appeared as though both sides faced the prospect of an unwanted replay, but substitute Murray came on to sink his former club as he was on hand to guide Uwe Hunemeier's header back across goal into the net.
- Brighton have progressed to the FA Cup Fourth Round in eight of the last nine campaigns.
- Each of Murray's last three FA Cup goals have come as a substitute.
- Murray has scored in back to back appearances for Brighton, after netting just once in his previous 10.
- Sako scored his first ever goal in the FA Cup, in what was his seventh appearance in the competition.
- No player has scored more goals in all competitions for Crystal Palace this season than Sako (5).
- Stephens scored his first goal for Brighton since netting versus Blackburn in December 2016 - 391 days ago.
- It was Stephens' first FA Cup goal since November 2010, while playing for Oldham Athletic versus Accrington Stanley.
Man of the match - Beram Kayal
Kayal suffered a cruel blow on the eve of the campaign as the Israel international was forced to have surgery for the eighth time in his career after breaking his leg during a pre-season friendly against Atletico Madrid.
But Kayal has recovered and backed up three Premier League appearances over the festive period with a stand-out display in helping his side reach the FA Cup fourth round for the eighth time in the last nine campaigns.
The former Celtic midfielder controlled the game in certain periods and showed his array of qualities on his return to the team, which will give Hughton plenty to ponder ahead of the trip to West Brom at the weekend.
Brighton travel to face West Brom at The Hawthorns in the Premier League on Saturday while Crystal Palace host Burnley on the same day.