Derry City 0 Waterford United 1: A David Mulcahy strike in the 38th minute maintained Waterford United's superb start to the season.
Waterford manager Alan Reynolds was convinced it was his side's "heart and workrate" that secured victory.
"We worked particularly hard and never lost our focus," he said. "Thankfully, we took advantage of one of the chances we created."
For Derry boss Gavin Dykes, frustration continues to grow.
"We didn't deserve to lose this one given our second-half performance," he said.
DERRY: Jennings; Brennan, Delaney, Hutton (McLaughlin, 50 mins), Hargan; McGlynn, Doherty (Gill, 78), Byrne, Martyn; Beckett, Farren (Holt, 24).
WATERFORD: Connor; Carey, Breen, Purcell, Frost; Reynolds, Mulcahy, Waters; Sullivan, Murphy, Bruton (Banville, 90 mins).
Referee: D McKeon (Dublin).