Monmouth's Josh Grey threatened to fire the home side to victory but was caught on the boundary for 97 in the dying stages off the bowling of veteran Paul Bennett.
Bailey (100 not out) shone in Chepstow's 213-5 from 40 overs but the hosts, Monmouth, looked in an excellent position, racing to 63-1 after 10 overs.
But the experienced Bennett eventually turned the match in Chepstow's favour, claiming the scalp of Grey, who struck 11 boundaries, Alim Hansraj (20) and Martin Newell.
Bennett, a Wales Over-50s player, finished with 3-11 from two overs, in a well-contested match witnessed by the largest crowd at Monmouth's Sports Ground for a number of years.
Monmouth skipper Paul Swingwood made 35 and Ian Morgan 15 as the hosts fought bravely but ultimately came up short, with Andy and Luke Bowley at the crease.
Monmouth, who are sponsored by JD Wetherspoon, finished on 203-8.
Left-arm spinner Josh Tregaskes bagged 1-19 for the visitors and Chepstow fielded very well.
Monmouth were indebted to a debut display from Luke Bowley in his first match for eight years and Jon Jones, who arrived later after completing a 50-mile charity bike ride with his wife Lauretta.
Earlier, Scott Bailey, Chepstow's wicketkeeper, struck a superb unbeaten 100, reaching the landmark with a quickly scampered two off the final ball of the innings.
Newcomer Jamie Rayner hit 45 and James Bostock made 23 for Chepstow, while Ben Turner took 2-38 for Monmouth, Hansraj (1-27), Andy Bowley (1-31) and Newell (1-54).
Monmouth's players congratulate Chepstow on their win and wish them good luck for their third-round trip to Division One high-fliers Panteg.


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