Amakhosi took the lead after 35 minutes when Flavio Silva turned home Glody Lilepo's cross from the right flank.
Stellies hit back in the second half though as Langelihle Phili equalised, finding the back of the net at the far-post after brilliant low cross from Devin Titus.
Titus was done there and struck the winner with four minutes of game remaining, curling a beautiful shot past goalkeeper Brandon Peterson.
It was a crucial victory for the men from the Cape Winelands as they move five points clear from the dreaded relegation zone.
The defeat could be pivotal in Amakhosi's hopes of annexing the Betway Premierhip trophy.
The Soweto giants' second loss of the campaign mean they are now eight points behind co-leaders Mamelodi Sundowns and Orlando Pirates, although they do have a game in hand on their rivals.
Next up for Chiefs is the Soweto derby against the Buccaneers on Saturday while Stellenbosch hace a home fixture against Amazulu on Friday.
Stellenbosch coach Gavin Hunt has lauded the impact of substitute Chumani Butsaka for his performance in the 2-1 come-from-behind victory over Kaizer Chiefs on Tuesday.
Defending champions Mamelodi Sundowns reclaimed top spot in the Betway Premiership with a dramatic 1-0 victory over AmaZulu at Moses Mabhida Stadium on Tuesday night, settled by a late Marcelo Allende strike.
AmaZulu head coach Arthur Zwane said his side are full of confidence heading into their Betway Premiership clash with title-chasing Mamelodi Sundowns on Tuesday night.
Khalil Ben Youssef says there is no reason why Kaizer Chiefs can't win the Betway Premiership this season.
