Matt Taylor's Saddlers were about to make it four unbeaten in League Two, having had Tyrese Shade dramatically cancel out Mickey Demetriou's early opener.
But Clarke – not offered a new deal at the Banks's at the end of last season – came back to haunt his old employers with an 87th-minute winner.
Walsall started poorly at Rodney Parade and, unsurprisingly, fell behind as Demetriou made the most of a goalmouth scramble.
A remarkable end to the first period then saw Carl Rushworth save Matty Dolan's penalty for the Exiles, with Shade stylishly opening his Saddlers account straight up the other end.
Taylor's lot looked relatively comfortable for decent spells of the second period but as fatigue crept in, Clarke had the decisive say.
On the balance of play, too, the hosts will feel they got what they deserved. Walsall have picked up eight points from as many league games.
Taylor made a surprise call as Brendan Kiernan, having been hailed as one of the 'most consistent' performers this season, dropped to the bench.
Coming in for him was Emmanuel Osadebe, entrusted to be a creative force in the No.10 role.
Rollin Menayese replaced Ash Taylor at centre-half in the other switch from their last league game, a 3-1 win over Mansfield Town.
Newport, meanwhile, made wholesale changes – seven to be exact – after a disappointing 1-0 loss to Northampton Town in midweek. Former Saddlers duo Clarke and Cameron Norman both started for them.
Exiles chief Michael Flynn was certainly looking for a response, and his charges were all over Walsall early on.
Midfield pair Aneurin Livermore and Ed Upson helped them completely control possession while the home fans made their presence felt.
The Saddlers were struggling to cope and it was no surprise to see Newport go in front nine minutes in.
Demetriou took advantage of indecision after a delivery into the box, finishing from close range.
The hosts were purring and Walsall needed a prolonged spell of possession to stem the tide.
First, though, they were let off the hook as Menayese's heavy touch allowed Dominic Telford through on goal, with his effort from a tight angle brushing the side netting.
The Saddlers did create half an opening as Kieran Phillips spun past his marker and sent in an inviting cross – nobody there to convert.
However, the Exiles looked sharper. Telford – despite his 5ft 6in frame – was having a fair amount of joy against Menayese and Manny Monthe.
Newport's midfielders continued to dictate the pace of play, too.
Walsall striker George Miller cut an isolated figure after his double against Mansfield. All of the attackers, in fact, were not having much influence.
Shade, though, would go on to step up in dramatic circumstances.
The Exiles were awarded a penalty right on the stroke of half-time as Hayden White pulled down his man.
Dolan stepped up and tried to side-foot the ball into the bottom corner, but Rushworth read him like a book to make a superb save down to his right.
And straight up the other end, Osadebe fed Shade, who cut inside from the left flank and unleashed a right-footed rocket beyond the helpless Nick Townsend. A crazy couple of minutes.
The Saddlers looked to take the momentum from that sensational strike into the second period.
They were not miles away from grabbing another goal right after the interval as well.
Osadebe powered through the middle on the counter-attack, but his through-ball towards Miller just had too much on it.
Walsall were operating at an improved level in the opening exchanges of the second half.
Osadebe harried shot-stopper Townsend and almost got the better of him. He was keen to drive at the Newport backline whenever he could.
Telford carried on being a nuisance for the Exiles and forced another important stop from Rushworth, but Walsall were holding their own.
Taylor brought on Kiernan for scorer Shade on the hour mark, and they soon hit the woodwork as Jack Earing's attempt cannoned off the unknowing Miller and then the bar.
As some Saddlers legs started to tire, they had to be extra wary of Telford, who stung the palms of Rushworth with another powerful shot.
Sam Perry replaced Liam Kinsella before Rushworth, yet again, denied the excellent Newport forward.
But just as they thought they had done enough, Clarke would have the last laugh as his looping header put Walsall's hot streak to an end.
A very tough pill to swallow but all things considered, the Exiles were probably worth the three points.
Walsall's search for their first away victory under Taylor goes on.
Newport (3-4-1-2): Townsend; Dolan (c), Clarke, Demetriou; Norman, Upson (Missilou, 79), Livermore (Azaz, 65), Lewis; Cooper; Fisher (Baker-Richardson, 57), Telford
Subs not used: Farquharson, Haynes, Ellison, Abraham
Goals: Demetriou (9), Clarke (87)
Walsall (4-2-3-1): Rushworth; White, Menayese, Monthe, Ward (c); Kinsella (Perry, 78), Earing; Phillips, Osadebe, Shade (Kiernan, 59); Miller
Subs not used: Rose (gk), Taylor, Mills, Bates, Willis
Goal: Shade (45+3)
Attendance: 3,825 (547 Walsall fans)
Referee: Lee Swabey