After a goal less first half at the County Ground the Reds were unable to deal with in-form Wolves and went two down before a last minute goal from Dexter Blackstock gave the home fans something to cheer about.
The 2-1 victory for Wolves moved them up to a play-off spot above Derby County ahead of the Rams game on Friday evening.
On-loan Arsenal striker Chuba Akpom made his Forest debut but it was ex-Gunner Benik Afobe who broke the deadlock just after the break and who Dougie Freedman called the 'difference' between the sides.
The Reds remain in 9th place in the Championship but after their second successive defeat they have no prospect of making the play-off places.
The attendance was 27,185.