The hosts started well and on two minutes Marcus Kelly forced a save from Alan Julian with a volley from 20 yards out.
A breakaway by Stevenage found Craig Dobson in the clear but he wasted the chance with a mis-directed pass, with his team-mates unmarked.
On 14 minutes a fine run by Tyrone Berry ended with Greg Pearson back-heeling just wide from five yards out.
Stevenage took the lead six minutes later, when Dobson pulled the ball back for full-back Barry Fuller who whipped in a great cross which resulted in Rushden defender Wayne Hatswell slicing into his own net.
On 24 minutes Jon Nurse had the ball in the net for Stevenage but the goal was ruled out for offside.
Rushden equalised in the 37th minute when Hatswell headed home from an acute angle after a short corner had been played in by Paul Watson.
Diamonds took confidence from the goal and teenager Tom Shaw volleyed just wide moments later.
In the 45th minute Rushden took the lead when skipper Chris Hope headed home from five yards out following another cross by Watson.
Stevenage obviously had a pep talk from their manager at half-time and they came out looking a completely different side, although it was Rushden who created the first chance when Kelly saw his shot deflected for a corner after fine work by Berry on the right.
The visitors grabbed an equaliser in the 49th minute when Nurse showed bravery flying in on the left-hand side after a good cross by full-back Fuller.
Rushden retaliated a minute later and Jon Ashton had his shot from 20 yards out comfortably saved by Julian.
On 67 minutes Berry almost put in Daniel Chillingworth, but the striker was unable to outpace the Stevenage defence, which looked more secure as the game went on.
Stevenage went close in the 71st minute when Dobson's shot from 20 yards out deflected off Steve Morison into the grateful hands of Nicky Eyre.
The visitors began to take a bit more control towards the middle of the half and they forced three corners in as many minutes.
But generally speaking both sides found it extremely hard to create the clear-cut chances which had been in abundance during the first half.
Rushden brought on their leading goalscorer Simeon Jackson to pep up their attack and made an effort to go on and record their first victory in six matches.
Jackson almost did this when his shot from 15 yards out struck the base of the post and rebounded to safety.
Both sides fought valiantly to gain victory, but the two sets of central defenders were in full control and the only danger in the closing minutes came from several in-swinging corners which Eyre had to punch to safety.