The Bills had lived up to their pre-season Super Bowl favourites tag after outscoring their opponents 72-17 in their first two outings, but they came unstuck in Florida.
Two touchdowns from Chase Edmonds propelled the Dolphins to a first win in eight against the Bills and gave them sole possession of top spot in the AFC East.
The Dolphins came out on top despite being outgained 497-212 in total yards, with Buffalo picking up 31 first downs to their opponents' 15.
Josh Allen has often been a menace against the Dolphins and completed a career-high 42 passes from 63 attempts for 400 yards and two touchdowns, but it was not enough for the Bills.
Miami took the lead with 10 minutes remaining through the second of Edmonds' touchdowns, and held on despite punter Thomas Morstead bizarrely kicking one into his own teammates' rear end and out of bounds for a safety.
Allen drove the Bills as far as Miami's 41-yard line on a completion to Isaiah McKenzie, but he was unable to get out of bounds and the clock struck zero before Allen could spike the ball for a potential game-winning field goal.
Jackson's five inspires Ravens
Lamar Jackson's five touchdowns inflicted a 37-26 loss on the New England Patriots and moved the Baltimore Ravens 2-1 in the AFC North.
Jackson became the first player in NFL history to register three-plus pass touchdowns and 100+ rushing yards twice in the same season, doing so in back-to-back games.
Mac Jones matched Jackson with a rushing touchdown and threw for 323 yards, but the Pats' offense ultimately self-destructed in a disappointing defeat at Gillette Stadium, with Jones limping off at the end to add insult to injury.
Mahomes interception proves costly
Mahomes finished the game 20 for 35 for 262 yards, one touchdown and that costly interception that saw the Chiefs fall to 2-1 for the year.
The Colts only took the lead with 24 seconds left in the fourth quarter as Matt Ryan and Jelani Woods hooked up for the second time with a 12-yard touchdown.