Buffalo struck for two goals in the first three minutes of the third period to break a 1-1 tie before a crowd of 16,191 and went on to a 4-2 victory.
The Capitals, who will play the Philadelphia Flyers tomorrow night at The Spectrum, still need a win to clinch a playoff berth in the Patrick Division.
Dave Andreychuk, who had two goals and and assist, took a shot from the right circle that Tony Tanti deflected past Mike Liut 59 seconds into the third period to put the Sabres ahead, 2-1, and they never relinquished the lead. One minute, 42 seconds later, former Capital Grant Ledyard scored on slap shot from center point during a power play.
The Capitals and Sabres traded first-period goals. Dimitri Khristich gave Washington a 1-0 lead at 17:25 when he cut across the slot from left to right and put a backhand past goalie Daren Puppa.
With 24 seconds remaining, Buffalo tied the game at 1 on Andreychuk's shot from the slot that beat Liut high and to the stick side.
The Capitals, who went more than 20 minutes without a shot on goal, from 8:03 of the second period to 10:59 of the third period, finally found their offense again.
Khristich, scoring his second goal of the game, skated out of the corner, beat Buffalo defenseman Dean Kennedy and put the puck through Puppa's pads to cut the lead to 3-2 with six minutes remaining.
However, Andreychuk scored his 36th goal of the season and Buffalo was home free.
"It was a very tough loss for us," said Capitals forward John Druce. "Buffalo is a very tough defensive team, and they are very stingy allowing shots. We knew we had to work the puck down deep and not turn the puck over at the blue line. We just never got the chances we needed because of Buffalo's defense.
"Khristich is really playing well now. He's a big strong guy, and he creates a lot of things. . . . We're fighting for our lives now, and we know the game in Philly will be a very big one. We're going into their building, and they are a very physical team. This could the most important game of the season for us."
NOTES: Dino Ciccarelli was honored before the game with an NHL achievement award for getting the 400th assist of his career. . . . D Al Iafrate served his one-game suspension last night, and C Peter Bondra and RW Jeff Greenlaw were scratched. . . . D Doug Bodger, C Christian Ruuttu, D Jay Wells, LW Mikko Makela, G Clint Malarchuk and Alexander Mogilny were scratched by Buffalo. . . . The Capitals continue to lead the NHL in penalty killing. They have allowed only 43 goals in 300 power-play opportunities.