The Demons 15.7 (97) lost to the Bulldogs 15.14 (104) in an entertaining clash.
After leading for most of the first half, Melbourne kicked one goal to three in the third term, which ultimately was enough for the Dogs to hang on for victory.
Melbourne had plenty of contributors, with Cale Morton, Brent Moloney and Brock McLean all registering career-best disposals, as they combined for more than 100 touches.
Morton and Moloney, who racked up personal bests against the West Coast Eagles last round, eclipsed them with 37 disposals each. Morton had 24 touches by half-time, while Moloney had 23. McLean also had 36 touches, equal with his personal best.
Forwards Matthew Bate (four goals) and Russell Robertson (three) were Melbourne's leading goalkickers, while Aaron Davey and Cameron Bruce continued their highly consistent seasons. Ruckman Paul Johnson also backed up with another fine effort.
The Demons opened with their equal best first quarter of the season, booting 5.2 to 3.3.
Melbourne's intent was again evident. This was epitomised in the first quarter when comeback Demon Matthew Whelan ran down Bulldog Daniel Cross with a fine tackle.
Bate kicked off proceedings and when the Dees jagged three in a row via Addam Maric, Robertson and McLean mid-way during the term, the home side was up by 17 points.
Two goals from the Dogs in red-time closed the gap back to 11 points at the first change.
The pendulum was still in favour of Melbourne early in the second term, when Bate and Nathan Jones kicked truly, giving it a 22-point advantage.
But the Dogs, largely through dynamo Jason Akermanis, got back into the match with six of the next nine goals. Akermanis kicked three majors during this period and when Dylan Addison landed one at the 28-minute mark the Dogs were back in front by two points.
However, when Bate kicked his third just before half-time, the Dees regained a three point lead.
Robertson kicked off the second half with his third, but it proved to be Melbourne's only major for the term. On the flipside, the Dogs answered with three in a row, gaining a 12-point lead at three quarter-time.
Bulldog Gilbee, who booted the last goal before three quarter-time, opened the final term with his second, giving the Dogs an 18-point buffer.
Just as the match was starting to look out of Melbourne's reach, the Dees sparked a revival with Maric landing his second and Davey threading through his first, igniting the red and blue army.
But a Boyd goal, after receiving a 50-metre penalty against Morton, and Scott Welsh's third put the Dogs back up by 18 points at the 21-minute mark.
Still, the Demons refused to lie down and they had one more roll of the dice, with Shane Valenti posting one on the run in time-on and Bate kicking his fourth moments later at the 26-minute mark. But it wasn't quite enough for the second win of the season.
Melbourne 5.2 10.3 11.4 15.7 (97)
Western Bulldogs 3.3 9.6 12.10 15.14 (104)
GOALS
Melbourne: Bate 4, Robertson 3, Maric 2, McLean, Sylvia, Jones, Petterd, Davey, Valenti
Western Bulldogs: Akermanis 4, Welsh 3, Gilbee 2, Murphy, Hahn, Johnson, Cooney, Addison, Boyd
BEST
Melbourne: Morton, Moloney, McLean, Bate, Johnson, Davey
Western Bulldogs: Akermanis, Giansiracusa, Gilbee, Boyd, Williams, Welsh
INJURIES
Melbourne: Nil
Western Bulldogs: Hargrave (leg) out, replaced in selected side by Addison, Murphy (hamstring)
Reports: Nil
Umpires: Nicholls, Hay, McInerney
Official crowd: 28,279 at the MCG
