Peterhead proved too strong for Ayr in an entertaining clash at Balmoor.
having lost 4-0 to Arbroath the previous week Peterhead were looking to put there play off place battle back on track.
United were looking to make the most of any slips by Brechin or Raith Rovers in the automatic promotion chase.
The Blue Toon took the lead in the 13th minute when Graeme Sharp headed home Daniel Moore's cross.
Ayr had chances themselves and Ryan Stevenson saw an eighth-minute header tipped on to the crossbar by Peterhead goalkeeper Michael Kula.
Martin Bavidge netted Peterhead's second and substitute Craig Gunn rounded off the victory with a 25-yard shot four minutes from the end.
United were disspointed to have lost so heavily, made worse by the fact that Brechin also lost.
Raith have now strecthed there lead at the top of the league.
Meanwhile boss Brian Reid has pleaded with Ayr United fans to roll up for the Cup replay with Lochee on Tuesday 23rd December.
He was disappointed that only 1079 watched Ayr hammer Alloa 3-0 last weekend. With an unbeaten home record he wants the public to turn out and support the clubs push for the top.
Reid sympathises with fans who have been dealt a heavy hand with the five times postponed Scottish Cup tie against Lochee United, followed by a horrendous festive fixture schedule with a trip to Peterhead five days before Christmas followed by a long journey to Brechin the night before Hogmanay.
The manager said: "I feel for the fans and I realise that money is tight, particularly with the credit crunch and the run-up to Christmas. And I know that lots of people are worried about their jobs.
"But I have to say that I was disappointed that we managed just over a 1000 for our first game in three weeks. If you had told me at the start of the season that we would be sitting a point off the top of the league and would be unbeaten at Somerset, then I would be expecting our home crowds to be around 1700 or 1800.
"We have a loyal core who always turn out and our away support is terrific but there are lots more out there who we need to get back.
The potential was shown when we had 3000 for the League Cup tie against Aberdeen.
"The team have been performing well but the more we can get through the gates will really help us."
A win over Lochee on Tuesday night will gave Ayr what will surely be a bumper crowd at Somerset Park for the Scottish Cup 4th rnd derby match against Kilmarnock.