Kick-off was delayed for 30 minutes due to traffic problems on the Forth Road Bridge and Raith were clearly in a hurry to get on with things, the home side finding themselves two goals to the good within eight minutes. Indeed, they scored with the game's first genuine attack, Joe Cardle catching the visitors' defence flat-footed as he raced through to beat Zander Clark with a low shot from the edge of the box.
Further dithery defending cost the visitors for a second time when a cross into the box sparked unnecessary mayhem and Paul Watson pounced to fire home from close range. Then, remarkably, Raith could have found themselves three goals ahead on 20 minutes but Ramsdens Cup goalscorer John Baird saw his shot rebound from the base of a post.
Queens got themselves back into the game, though, when Chris Mitchell sent over a pinpoint cross and Mark Durnan was on hand to head firmly into the net. They now had their tails up and they were level before the break with a replica of their opener, Mitchell delivering and Durnan doubling his tally.
Raith rallied to enjoy the better of the chances on the restart and were not to be denied, scoring the crucial winnner with 10 minutes to go when Callachan's cross offered Baird the chance to produce a clinical finish.
But they were left hanging on when Reece Donaldson, booked earlier, was shown a second yellow near the end.
Queens' remain level on points with Dumbarton whom they visit on Saturday in a pivotal play-off test.