With Hertha winning 2-0 at Cologne and Bayern enjoying a 3-0 victory over Bayer Leverkusen, Wolfsburg stay top of the Bundesliga only by virtue of a better goal difference.
"Although Dortmund were very strong, we kept up the pressure and got the reward," said Wolfsburg coach Felix Magath. "And amongst our strikers we have natural high qualities."
Bayern's win also puts them on 63 points and they are two behind Wolfsburg on goal difference, while Hertha are third on 62 points with two games left.
Fourth-placed Stuttgart now need to win at Schalke on Wednesday if they want to stay in the title race.
Wolfsburg's Dzeko hit his 21st goal of the season when he latched onto a through ball in Dortmund's penalty area after only 14 minutes. And Grafite moved one clear of Stuttgart's Mario Gomez as the league's top scorer with his 24th goal in 23 league games when he accepted Dzeko's simple tap in on 47 minutes.
To add insult to injury, Dortmund had Kevin-Prince Boateng sent off for a dangerous tackle before Dzeko added his second with five minutes remaining as Dortmund finally had their seven-game winning streak broken.
"We did not lose here undeservedly, yet we do not have the feeling that we failed," said Dortmund coach Jürgen Klopp. "Wolfsburg simply have outstanding quality in their strikers, we did what we could, but it wasn't enough."
Defending champions Bayern Munich ran riot against Leverkusen as Luca Toni opened the scoring just after the half-time break when Bayern's caretaker coach Jupp Heynckes read his side the riot act at half-time.
"We played okay in the first-half, but we were too jerky in our movement," said Heynckes. "In the half-time break, I made it clear to the players that they must play
differently and not be so defensively and the result was there for all to see."
Then French midfielder Franck Ribery added a second on 59 minutes with a clever flick over Bayer goalkeeper Rene Adler. And Bayern striker Lukas Podolski - who is heading back to his former club Cologen at the end of the season - was set up by his Germany team-mate Bastian Schweinsteiger to hit Munich's third on 71 minutes.
Hertha Berlin are still in the title race after their 2-1 win at Cologne thanks to Brazilian Cicero and midfielder Patrick Ebert while the home side pulled back a late consolation goal.
Bottom side Karlsruhe look almost certain to be relegated as they squandered a 2-0 lead to slump to a 3-2 defeat at home to Hannover and the league's last team are four points from safety with two games left.
On Wednesday night, UEFA Cup finalists Werder Bremen are at Eintracht Frankfurt, while Stuttgart must win at Schalke to keep their title dreams alive.
Hamburg are at home to Bochum while relegation candidates Energie Cottbus are at home to Borussia Moenchengladbach and Arminia Bielefeld are at home to Hoffenheim.