United had two 'goals' disallowed and missed a penalty ahead of suffering a first league defeat since August.
The 'game in hand' saw no points gleaned as Amadou Bakayoko's goal sealed Walsall's win.
Freeman returned to the starting XI, replacing Wright, who picked up a hamstring problem in the weekend's draw at Charlton. As expected, Basham moved to a more central role.
An impeccable minute's silence was observed prior to kick-off as a mark of respect to Brazilian team Chapecoense as members of their team and staff lost their lives in an aviation disaster earlier in the day.
Despite seeing a lot of possession, United did not make a fluid start and Walsall were able to apply pressure. They won a couple of early corners and Oztumer curled a free-kick against the crossbar on ten minutes after Ebanks-Landell's foul on Edwards.
Clarke headed wide a Duffy cross after patient build-up and before the half hour mark Duffy was off target from distance and Fleck had an effort blocked.
On 33 minutes United went close. From Fleck's corner, O'Connell's powerful header was saved by goalkeeper Etheridge and Laird cleared the loose ball off the line. The Blades were on top and Lafferty had a near post shot saved and a Sharp blast was blocked ahead of Walsall snatching the lead with the last chance of the half.
Oztumer, on 42 minutes, threaded a ball between Basham and Ebanks-Landell and BAKAYOKO raced on to poke beyond Moore, who raced from his line.
The visitors had a chance to double the advantage just 36 seconds after the restart but Moore touched Oztumer's effort over the crossbar.
United hit back as the noise level on the Kop increased. Appeals for a penalty were turned down when Sharp fell under Preston's challenge and Freeman got around the back of the Walsall defence but his low cross evaded everyone.
The ball was in the net on 56 minutes when O'Connell placed through Etheridge's legs from Fleck's cross but referee England blew for a foul in crowded penalty area which included Clarke, Basham and Ebanks-Landell.
United were dominant but clear chances were hard to come by. Fleck's ball drew Etheridge from his goal but Clarke was sent wide and a subsequent Coutts shot was blocked and Lafferty flicked wide with the outside of his boot after losing his marker.
For the final 20 minutes Chapman replaced Basham as Wilder reshaped his formation. The pressure continued and Duffy almost caught out Etheridge with a free-kick on 77 minutes.
Lavery was introduced for the final ten minutes and quickly delivered a cross from Clarke to head wide and there was more drama to follow. On 84 minutes Fleck''s shot was blocked by the hand of O'Connor and referee England pointed to the spot. Skipper Sharp took responsibility but his spot kick was saved by Etheridge, low to his left.
The pressure was still coming from United. From Chapman's cross, O'Connell headed onto the roof of the net and Duffy slipped as he was about to shoot.
Just as five minutes of added time was indicated there was more drama. Fleck delivered wide to Chapman, whose cross was bundled over the line by Sharp but as the skipper celebrated, the referee indicated a handball and disallowed.
There were more chances in injury-time. Freeman drilled into the goalkeeper's body and from a corner, which Moore raced forward for, Sharp was unable to direct Clarke's header towards goal.
Etheridge came and collected another cross in the final minutes of added time to ensure it was not United's day.
Blades: Moore, Fleck, O'Connell, Basham (Chapman 69), Sharp, Coutts, Freeman, Ebanks-Landell, Duffy, Lafferty (Lavery 81), Clarke.
Unused: Hussey, Scougall, Done, Ramsdale, Brown.
Walsall: Etheridge, Edwards, Laird, O'Connor, McCarthy, Dobson (Osbourne 69), Chambers, Oztumer (Ginnelly 69), Morris, Preston, Bakayoko (Jackson 77).
Unused: Cuvelier, MacGillivray, Kinsella, Makris