On the day when Manchester remembered those who lost their lives 50 years ago in the Munich air disaster, the blue half of the city dealt a major blow to red dreams of retaining the Barclays Premier League by running out 2-1 victors.
City fans behaved impeccably during an emotional minute's silence and their team were just as impressive, completing a league double over their neighbours for the first time since 1970 and their first win at Old Trafford since 1974.
Darius Vassell and new boy Benjani Mwaruwari scored first-half goals for City and United's only reply was in injury-time from Michael Carrick.
For City boss Sven-Goran Eriksson, it was three wins out of three against Sir Alex Ferguson.
He has added this priceless double to a European Super Cup triumph over United in 1999 when he was at Lazio.
This ended United's 13-match winning streak, their best run in 103 years, and gave Arsenal a real boost at the top of the table.
In the 24th minute City stole ahead. Stephen Ireland found Martin Petrov and raced on into the box to take the return.
The ball broke to Vassell who saw his first shot hit Edwin van der Sar, but he was quickly on to the rebound to blast the ball home, sending City's fans wild.
United hit back and Joe Hart saved superbly from a Carlos Tevez shot on the turn.
Then Cristiano Ronaldo lifted a 25-yard free-kick over the bar.
But a minute from the break City went two ahead.
Petrov's angled cross was flicked on by Benjani and the ball squeezed just inside the far post.
In injury-time, substitute Carrick drove the ball home from the edge of the box but it was too little, too late.