Manchester City completed a torrid week for United with a comprehensive win over their fierce rivals.
United, hoping to forget their European exit, went behind in the third minute when Robbie Fowler touched the ball in.
Jon Macken then swivelled and sent a first-time volley into the corner of the net before Paul Scholes gave the visitors hope with a 20-yard strike.
But Trevor Sinclair pounced after a Mikael Silvestre error and Shaun Wright-Phillips hit a stunning drive.
The scoreline, though, was harsh on United, who lost to their neighbours for only the third time in Sir Alex Ferguson's 17-year reign.
The visitors hit the woodwork twice and always looked more dangerous on the attack but still contrived to be behind at half-time.
The match started at a frenetic pace, Scholes adding to an already electric atmosphere inside the City of Manchester Stadium wth a late, lunging tackle on Michael Tarnat.
But the City fans were in dreamland moments later when Fowler gave them the perfect start.
The former Liverpool striker beat Phil Neville to Antoine Sibierski's flick-on before calmly slotting the ball under Tim Howard's body.
United almost cut short the celebrations a minute later when City keeper David James palmed away a fierce Scholes shot straight into the path of Ronaldo, who smacked his effort onto the foot of the post.
The visitors continued to carve out openings, but with an equaliser looking almost inevitable, United suddenly found themselves two goals behind.
3 mins: Fowler fires City into the lead
32 mins: Macken doubles City's lead against the run of play
35 mins: Scholes powers home to reduce the deficit
73 mins: Sinclair pounces to put City in control
90 mins: Wright-Phillips completes United's misery
Former United trainee Jon Macken latched onto a loose ball and his shot on the turn squeezed through Mikael Silvestre's legs and inside the post.
But their two-goal cushion lasted less than three minutes as Giggs laid off Ronaldo's cross to Scholes, who lashed the ball home.
City, looking for a win in the first derby staged at the City of Manchester stadium, were reeling and Ronaldo came agonisingly close to an equaliser when his curling shot came off the crossbar.
The Portuguese winger was again involved moments later when his cross just evaded Scholes' outstretched foot.
The half-time whistle saved City from the barrage and Kevin Keegan responded by bringing on Paul Bosvelt and Sinclair for Claudio Reyna and Steve McManaman.
However, United continued to look the more likely scorers after the break, but as in the first half, Ferguson's side were hit by a sucker punch.
Sinclair pounced on a dreadful error by Silvestre, who miskicked his lay-off to Wes
Brown, and lifted the ball over a stranded Howard.
With full-time approaching, Wright-Phillips unleashed a ferocious shot to complete a stunning win and leave the Premiership champions 12 points behind leaders Arsenal with 10 games remaining.
Man City: James, Dunne, Van Buyten, Distin, Wright-Phillips, Reyna (Bosvelt 45), Sibierski (Jihai 84), McManaman (Sinclair 45), Tarnat, Macken, Fowler.
Subs not used: Arason, Wanchope.
Man Utd: Howard, Phil Neville, Brown, Silvestre, O'Shea, Ronaldo (Solskjaer 72), Fletcher, Butt, Giggs (Forlan 77), Scholes, van Nistelrooy.
Subs not used: Carroll, Bellion, Lynch.
Booked: Butt, Scholes.
Referee: S Bennett (Kent).