Diomansy Kamara struck the winner as West Brom wrestled the advantage in their Championship play-off tie.
Phillips scored a superb opening goal for West Brom
Kevin Phillips's 20-yard strike put WBA ahead before Jody Craddock equalised for Wolves with a header.
Seyi Olofinjana bundled the ball home early in the second half to put Wolves in front, but Phillips restored parity immediately with a far-post header.
And after Gary Breen played Kamara onside, Kamara struck to condemn the unfortunate Wolves to defeat.
The scoreline was harsh on the home team who created most of the openings and played with great verve and enthusiasm at a sodden Molineux.
The young attacking trio of Jay Bothroyd, Michael Kightly and Andy Keogh looked to interchange positions across the forward line and stretch the Baggies defence.
Keogh's wonderfully weighted pass played Kightly through after six minutes but Kiely charged from his goal and made a great smothering save.
Neill Collins made solid contact with a Michael McIndoe free-kick but his header flew narrowly wide of the post.
And although Jason Koumas showed in glimpses the skill that makes him such a dangerous player, WBA did not threaten Wayne Hennessey's goal until Phillips' thunderous opener after 25 minutes.
Gratefully accepting an awful clearance from Breen, the 33-year-old took one touch before drilling the ball past Hennessey with his right foot.
Hennessey was making his debut in goal for Wolves after regular keeper Matt Murray broke his shoulder in training on Saturday.
The 20-year-old, who spent several months on loan at Stockport, looked nervous after conceding and shortly afterwards dropped a cross, with Breen partially atoning for his role in the Baggies first goal by reacting quickly to clear the loose ball.
Wolves regrouped and Kiely made another excellent smothering save from Kightly, who shortly after shot narrowly over from the apex of the penalty area.
Bothroyd also headed wide and Keogh shot over as Wolves pushed for an equaliser before the break - and with 44 minutes gone Craddock delivered.
Olofinjana (right) scored the put Wolves 2-1 ahead
Keogh chased after an awful shot, just keeping the ball in play close to the corner flag, before delivering a superb cross that Craddock met at the near post.
West Brom should have taken the lead again in injury-time but Paul Robinson headed wide.
Kamara shot wide for West Brom before Bothroyd forced a save with a free-kick as the opportunities continued after the break.
And after Craddock headed a cross back across goal, McIndoe's touch was met by Olofinjana, who bundled the ball home.
But Wolves led for just one minute 35 seconds before Phillips's headed equaliser.
And Breen's terrible afternoon continued when he failed to advance with the rest of his defence, allowing Kamara to stay onside and collect a long pass forward before finishing superbly from a tight angle.
Bothroyd went close from distance but Kiely made a great late save from Kightly as WBA held on to take a one-goal advantage into the second leg at the Hawthorns on Wednesday.
Wolves boss Mick McCarthy on WBA keeper Dean Kiely:
"He's a fantastic goalie, a great pro and he has proved what an asset a top keeper is.
"I shouldn't be sitting here as a defeated manager.
"Their finishing when they had the opportunities has been better. We have run all over them for a large part of the game but been punished."
West Brom boss Tony Mowbray:
"I don't think it was a very good performance.
"We can be a lot better than that and we will need to be, I would suggest (in the second leg).
"There were some things we weren't too happy about but I'm not sitting here all mister grumpy.
"We have won and it is a very difficult place to come and get a victory."
Wolverhampton: Hennessey, Neill Collins, Breen, Craddock, McNamara (Little 78), Kightly, Olofinjana, Potter, McIndoe, Bothroyd (Ward 78), Keogh.
Subs Not Used: Oakes, Mark Davies, Gleeson.
Goals: Craddock 44, Olofinjana 52.
West Brom: Kiely, McShane, Perry, Sodje, Robinson, Greening, Chaplow (Carter 26), Koren (Gera 64), Koumas, Phillips (Ellington 69), Kamara.
Subs Not Used: Daniels, Albrechtsen.
Booked: Sodje, McShane.
Goals: Phillips 25, 54, Kamara 73.
Ref: S Tanner (Somerset).