Jimmy Bullard's superb strike gave Fulham their first win of the season.
Bullard proved the difference between the sides
Bullard was in great form throughout and capped his excellent display with a free-kick of top quality, which curled into the top left-hand corner.
That was in the 40th minute, but Fulham had nearly opened the scoring before that when Collins John hit the foot of the upright with a low shot in the box.
Bullard later crashed a shot against the post, while a Mikele Leigertwood volley was United's only real effort.
For a while, it had seemed that the only player who would provide a goal threat was Bullard.
He nearly profited from a speculative shot early on, which Paddy Kenny allowed to squirm out of his grasp and out for a corner.
Shortly after Bullard tried his luck from distance again, this time Kenny easily smothered the effort.
Kenny told the United staff he was feeling unwell during the match but without a replacement keeper on the bench, he had to continue.
However, it is unlikely that two keepers would have prevented Bullard's free-kick from sailing in.
In a game of low quality, Fulham deserved to win - their defence holding firm against a blunt United attack, while their own attack should have added more than the one goal.
The only time Fulham really looked in trouble was when Danny Webber found space in the penalty area and tucked the ball into the corner - only for the effort to be disallowed for offside.
The tempo dipped after the break and newly-promoted United struggled to make an impression.
The hosts were little better for most of the time but their top-flight experience told, with Papa Bouba Diop the difference in midfield.
But sensing their need to pick up points at places like Fulham, United began to press on.
The trouble was they lacked the know-how to make any inroads and instead presented their opponents with opportunities for the counter-attack.
And Fulham should have scored their second and killed the game when substitute Tomasz Radzinski was put through by Bullard.
But he appeared short of confidence and scuffed his delivery across the box and could only get a hopeful header on the rebound.
Bullard did his best to rescue a wasted chance and thumped the loose ball with his right boot and deserved better than to see the ball smash off the woodwork.
Late on, Brian McBride fizzed a low shot across the box and wide of the upright after he had been played clean through.
Fulham manager Chris Coleman:
"On the balance of play and on chances we should have been ahead by more than one goal.
"That is always a cautious scoreline and we were hanging on a little bit during the last 15 minutes.
"But we broke well - hitting the post twice - and anything less than three points would have been a travesty."
Sheffield United boss Neil Warnock:
"I thought Fulham wasted 10 or 15 minutes and we only played an extra five - we have to learn from that.
"I'm disappointed with the free-kick which led to their goal. It was never a free-kick. It was a fabulous finish but never a free-kick.
"I told referee Graham Poll it was never a free-kick in a million years."
Fulham: Niemi, Rosenior, Christanval, Pearce, Queudrue, Brown (Radzinski 68), Diop, Bullard, Boa Morte, John (Helguson 67), McBride.
Subs Not Used: Drobny, Volz, Bocanegra.
Booked: Diop, Helguson, Bullard.
Goals: Bullard 40.
Sheff Utd: Kenny, Bromby (Sommeil 80), Morgan, Jagielka, Unsworth, Montgomery (Nade 64), Tonge (Alan Quinn 72), Leigertwood, Armstrong, Hulse, Webber.
Subs Not Used: Bennett, Akinbiyi.
Booked: Tonge, Leigertwood, Alan Quinn.
Ref: G Poll (Hertfordshire).