Midfielder Jamie Barjonas broke the deadlock with a low strike in the 37th minute, but Tony Wallace had Annan level just before half-time at New Central Park. The home side rallied in the second half and Kallum Higginbotham struck with 16 minutes left when his long-range effort went in off a post.
Stirling Albion remain second after a 2-0 win at Elgin with second-half goals from Martin McNiff and Dale Carrick.
A first-half goal from Paul Woods was enough to give Stranraer a 1-0 home win over Albion Rovers.
Strugglers Stenhousemuir snatched a 1-1 draw at home against Forfar with a last-minute goal from defender Sean Crighton. Edinburgh City and Cowdenbeath shared the same scoreline on Friday night with goals from Kris Renton and Danny Handling.