The Fife side looked set for victory after dominating for long spells but one of their former players, John Baird, equalised for Forfar with only three minutes left.
Raith had the better of the first half and it was no surprise when they went in front when Jamie Barjonas beat Marc McCallum with a low shot from outside the area.
They dominated at the start of the second half and should have added to their lead. Euan Murray and Kevin Nisbet had decent attempts with headers but neither troubled McCallum. Raith paid for not taking their chances when Baird equalised with a right-foot shot from 15 yards.
Airdrieonians also had to be content with a point in a 2-2 draw at home to Dumbarton. Darryl Duffy opened the scoring after only two minutes with a right-foot shot from Leighton McIntosh’s pass.
Ryan Conroy almost doubled Airdrie’s lead early in the second half but Grant Adam produced a fine save. Dumbarton took heart and Bobby Barr, pictured, equalised in 56 minutes with a terrific 20-yard shot which flew past David Hutton.
McIntosh put Airdrie back in front but Dom Thomas salvaged a point for Dumbarton with an 86th-minute equaliser.
Montrose came from behind to swamp Brechin City 5-2. They snatched an early lead when Paul Watson netted from close range after good work by Martin Rennie, but Brechin turned the tables with two goals in four minutes. Euan Smith equalised with a right-foot shot and Lewis Toshney put Brechin in front.
Watson scored his second goal to bring Montrose level after 29 minutes and, four minutes later, Euan Henderson headed in a cross from Iain Campbell to make it 3-2.
Ryan Harrington gave the home side a two-goal cushion when he scored with a right-foot shot with 17 minutes left and then Craig Johnston scored the fifth.