The Deise won 1-18 to 1-17 in a thrilling Division 1A encounter at Semple Stadium.
It seemed as though a late John McGrath goal would get Tipp the two points but Waterford fought back with Austin Gleeson's spectacular long-range free getting them over the line.
Tipperary will now face Galway in what looks like a must-win game if they're to make the last eight of the league.
Despite the defeat Michael Ryan says there are a lot of positives to be taken from his side's performance.
