Just call Carlos Tevez Captain Fantastic! The Argentine striker conjured one of those magic moments that are his speciality to offer Chelsea more compelling evidence that City now have the Indian sign over them.
Tevez's strike just before the hour was enough to turn an admirable team performance into the Blues' third consecutive victory over the champions, who also succumbed to a Premier League double last season.
Vincent Kompany, who never put a foot wrong at the back, was named man of the match but there wasn't a City player who did not make a valuable contribution to a stirring triumph that derailed Chelsea's runaway start.
City hauled themselves to within four points of the visitors, cited by Roberto Mancini as probable League champions once more and, on this evidence, there is no clear reason why the Blues cannot match them this winter.
They got off to a reasonable start, and might even have given Petr Cech an early jolt if Tevez had connected more accurately with a smart first-time through ball from Nigel de Jong, but the skipper shot early and wide.
When Pablo Zabaleta's cross proved a few inches high for Tevez, Chelsea could not get the ball way and Milner sand Barry both had efforts charged down before Zabaleta fired in a shot that Cech gladly embraced.
Chelsea attempted to make inroads at the other end, but could muster only a half-decent effort from Michael Essien that skidded well wide of the post, though Kolo Toure and Joe Hart did have a "Blackburn" moment soon after.
The champions, who arrived with a welter of goals behind their supersonic start, looked at times to be parking the bus, as one of their former managers once commented, as City buzzed brightly and with real intent.
However, it was the champions who almost drew first blood when Chelsea raider Branislav Ivanovic nodded against the bar from a corner then saw Hart pull off a good reflex save from the follow-up effort.
The physical element to the game, maybe fuelled by last season's double by City, reared its head with a powerful Michael Essien tackle that sent De Jong sprawling then a booking for Zabaleta's foul on Ivanovic.
Chelsea's smart passing saw Anelka and Malouda combine down the left flank for the latter to cross into space outside the box but Essien, with plenty of time, drove his shot high into the jeering crowd.
David Silva raised the second-half temperature with a fine angled shot from De Jong's astute pass, forcing Cech into a save at the foot of his near post as City renewed their efforts to break the deadlock.
The breakthrough came after 58 minutes, ironically with Chelsea pressing - Zabaleta belted a big clearance out of the box and suddenly City's counter caught the champions on their heels, with dire consequences.
Milner and Yaya Toure moved the ball along swiftly to Tevez, and he had Chelsea's defence backpedalling until he struck a low shot through Ashley Cole's legs and across Cech to squeeze in off the inside of a post.
Chelsea were furious with themselves at conceding - and in a similar manner to the counter-attacking goals that undid them at Stamford Bridge last season - and the game became fiercer, with no quarter asked or given
When John Obi Mikel caught Tevez he became the first Chelsea player into the referee's book, and Barry and De Jong in particular were in the thick of the action agains the most physically powerful side in the division.
But City matched them and Carlo Ancelotti, sensing a first Premier League defeat of the campaign, sent on former Blue Daniel Sturridge for the lacklustre Didier Drogba, to the vociferous derision of the home crowd.
His reception contrasted with the huge cheer that accompanied winger Adam Johnson's introduction for David Silva soon after as the game entered its final, nerve-racking phase with so much at stake.
Tevez curled a free kick just wide after John Terry had climbed all over the City skipper - who made way for Emmanuel Adebayor to rapturous applause minutes before the roar that greeted the result of the season ... so far.