Captain Lee Carsley produced a second half equaliser that looked to have earned his side a draw but Forest striker Robert Earnshaw had the last laugh to win the match for the hosts.
On an afternoon when further pre-season preparation and gaining more valuable match sharpness were always going to be far more important than the result Alex McLeish's men will still have been left with a tinge of disappointment that they conceded a second goal so soon after getting back on level terms.
Manager McLeish named a strong team as Blues continued their pre-season preparations.
Goalkeeper Joe Hart was between the sticks, guarded by a defence that included the fit again Stuart Parnaby who had recovered from a slight groin problem.
The midfield carried experience in the form of captain Lee Carsley, Barry Ferguson and Damien Johnson and the attack had a dangerous look about it with James McFadden and Cameron Jerome hoping to cause Forest problems.
The hosts have spent over the summer months and included some of their new boys, the likes of ex-Derby keeper Lee Camp, former Preston midfielder Paul McKenna and ex-QPR striker Dexter Blackstock in their side.
Forest started brightly and with just six minutes played Polish midfielder Radoslaw Majewski made in-roads and created an opportunity to shoot from 25 yards but it was straight at Hart and well held by the keeper.
With 12 gone Parnaby appeared to be fouled by Joe Garner in centre field but the referee waved play on and David McGoldrick unleashed a speculative effort that was well saved by Hart down to his right.
Blues stepped things up and from a long Hart clearance down the left Jerome darted past his man and broke clear. The striker cut back inside and attempted a cut-back in the direction of Gary McSheffrey but Wes Morgan scooped the ball behind for a corner.
A competitive period of play with plenty of tackles flying in followed before, on 19, McSheffrey let fly with a long distance effort that flew over the bar from 40 yards.
Forest briefly threatened when a Chris Gunter cross from right was headed wide by Blackstock before, at the other end, a McSheffrey cross from left towards Jerome was turned over his own bar by defender Luke Chambers on 34.
Blues came really close from the resulting corner. James McFadden flighted a lovely one over from the right and giant centre-half Roger Johnson got on the end of it at the back post. He nodded the ball to McSheffrey, who had ventured to the edge of the six-yard box, who cushioned a header just a yard or so wide.
Barry Ferguson then went on a charge down the right before being felled just outside the area. The resulting McFadden free-kick was chested behind by Morgan shortly before Forest keeper Lee Camp was called into action to tip a dipping McSheffrey effort from the edge of the area just over the bar.
The home side rallied and on 42 a Dexter Blackstock close range effort was well saved by Hart following a Chris Cohen corner.
That should have served as a warning to Blues but as the visitors pressed forward they instantly handed the ball back to Forest and when Joel Lynch crossed from the left Blackstock pounced at the back post to head the ball back to the onrushing McGoldrick who gleefully swept it into the back of the net from close range.
Blues came out of the blocks well in the second half and with just four minutes played were very nearly on level terms.
A pinpoint Gary McSheffrey free-kick from the left found the head of Martin Taylor, the defender having charged into the area. He made a firm contact from just four yards that forced Camp into an acrobatic save.
Unfortunately, however, the opportunity proved doubly costly for Tiny as not only did the ball not only not hit the back of the net but he also ended up getting injured in the process. He was stretchered off with his right leg in a brace and everyone connected with Blues will be hoping the problem is not too serious.
On 58 Gary McSheffrey replaced by Bent and Forest made a raft of changes too, changing their entire frontline so it now included former Blue Dele Adebola.
Adebola caused problems straight away, forcing saves from Hart (pictured) with both his head and right foot before, with 65 played, McFadden released Damien Johnson, who held the offside line well on the right to receive the ball from the Scot, for him to cross just over the head of Jerome.
Paul McKenna then shot straight at Hart from the edge of the box and Adebola was involved in the action once again when his shot deflected wide for a corner and then he headed the resulting set-piece wide.
The game was swinging from end to end in the pouring rain and by the time an injured Bent had been replaced by Academy starlet Luke Hubbins having been on the field of play just a quarter of an hour , Camp was adjudged to have been fouled in the area after missing a Parnaby cross. Jerome was preparing to pull the trigger as the referee blew his whistle.
Keeper Hart continued to impress with a full stretch dive to his left to push away a Lewis McGugan piledriver.
Then, on 79, Blues equalised with a quality move. Johnson drifted out to the right again and once more released by McFadden took the ball forward. He held it in play with the goal-line fast approaching and cut it back to the advancing Lee Carsley, who struck a sweet effort inside Camp's near post from ten yards.
It looked at that point as though the visitors were set to raise their game even higher and go on and win the game but just two minutes after levelling Blues were behind again.
Forest sub Garath McCleary knocked a ball forward and the livewire Earnshaw produced a cleaver spin to leave the visiting backline bamboozled before placing an unstoppable low finish to Hart's left.
After Rowe had been booked on 84 for hauling back Earnshaw there was still time for the Forest man to cause further problems. He beat Hart to ball on the touchline, although in truth the striker was aided by it sticking in a puddle. Earnshaw nicked it over Hart but thankfully the angle proved too tight and the frontman hit the side netting.
Blues: Joe Hart, Stephen Carr, Martin Taylor (Jacob Rowe 50), Roger Johnson, Stuart Parnaby, Gary McSheffrey (Marcus Bent 58/Luke Hubbins 73), Barry Ferguson, Lee Carsley (C), Damien Johnson, James McFadden, Cameron Jerome. Unused subs: Colin Doyle, Jared Wilson, Ashley Sammons, Shaun Timmins.
Forest: Lee Camp, Luke Chambers, Wes Morgan, Joe Garner (Lewis McGugan 65), Chris Cohen (Nathan Tyson 59), Chris Gunter, David McGoldrick (Dele Adebola 59), Paul McKenna (C), Dexter Blackstock (Robert Earnshaw 59), Radoslaw Majewski (Garath McCleary 65), Joel Lynch. Unused subs: Paul Smith, Aaron Mitchell, Paul Anderson, Arron Davies.
Attendance: 6,735 (783 Blues fans)
Referee: Mr A Woolmer
Venue: The City Ground