Berwick made it three games without a win when they went down to promotion-chasing Annan at Galabank.
Rangers, with only one point from their two previous games, were keen to get back to winning ways, but they lost out to a first half penalty from Ally Love, a second half double from Kenny MacKay and a late header from Peter Watson.
With the top four teams all picking up points and Montrose winning, the defeat meant The Borderers dropped to eighth place in the table, six points off the play-off places with nine games remaining.
Player-manager Colin Cameron switched things around. With Steven Notman suspended, Ross Gray returned, whilst Ben Miller started ahead of Cameron, who was on the bench. Scott Dalziel was back from his one match ban, but strike partner Darren Lavery missed out, with recent signing Andy Russell making his first start up front.
In the first five minutes, Miller had a shot from outside the box saved by Kenny Arthur in the bottom corner.
Russell and Damien Gielty both had shots from outside the box which were too high, and Dean Hoskins also went close with a shot after 25 minutes as Berwick made most of the running.
A minute later Kenny MacKay forced Michael Andrews into making his first save in the Berwick goal, with a header towards the bottom corner. But Berwick still looked a danger and Miller and Russell then both shot over.
However, the tone of the game turned in the 37th minute when Hoskins was booked for a foul on MacKay in the box and Ally Love converted from the penalty spot to put the home side 1-0 in front.
Just minutes before half-time Andy Mitchell went close to doubling Annan’s advantage, but his header was saved low down by Andrews.
Just a minute before the break Hoskins went close with a header from a corner, which was also saved well by Arthur.
At the start of the second half a Gray header brought out another good save from Arthur, low to his left, but a second goal from Annan after 56 minutes, a close-range header from MacKay after being set up by Steve Sloan, left Rangers facing an uphill battle.
With the home side growing in confidence Berwick were forced onto the back foot for a while with MacKay and Love (twice) seeing efforts drift narrowly wide within the space of three minutes.
And it came as no real surprise when MacKay fired in his second, and Annan’s third after 70 minutes, finding the net with a shot from outside the box after being set up by Martin McNiff.
Lee Currie had a shot saved by Arthur after 80 minutes but in the 88th minute Annan made their afternoon complete with Watson heading in his side’s fourth from a corner by Mitchell.
Just before the final whistle Mitchell also shot over as Annan claimed all three points to remain five behind leaders Peterhead.
Annan: Arthur, Mitchell, Watson, McNiff, Chisholm, Sloan, Black, Jardine (Flynn 84), Love (Brannon 84), Mackay (Trialist 86), Davidson
Subs: Trialist, Orsi, Moffat, Mitchell, Brannon, Bradley,Flynn
Berwick: Andrews, Jacobs, Dunlop (Fairbairn 74), Hoskins, Drummond, Gray, Miller (P Currie 57), Gielty, Currie Dalziel (Morris 74), Russell.
Subs: Fairbairn Cameron Currie Bald Morris O’Brien
Referee: Mike Taylor.