Celtic 1-2 Rangers
Rangers gained quick revenge for last weekend's league defeat at Celtic Park by retaining the CIS Insurance Cup in a scintillating and controversial Old Firm final.
Recalled Claudio Caniggia and Peter Lovenkrands both fired home in the first half at Hampden Park.
Celtic got back into the game after the break through the prolific Henrik Larsson.
The league champions then had what looked like a genuine goal chopped off for offside, had Neil Lennon sent off and John Hartson missed a penalty as Rangers held out for victory.
Celtic boss Martin O'Neill had avoided the temptation to rest some of his players with Thursday's second leg of the Uefa Cup quarter-final against Liverpool in mind.
However, he recalled captain Paul Lambert to the starting line-up, with Stilian Petrov dropping to the bench.
Rangers boss Alex McLeish made three changes, Caniggia, Michael Mols and Ronald de Boer replacing Neil McCann, Shota Arveladze and Maurice Ross.
Celtic dominated possession in the early stages, but it was Rangers who nearly took the lead after 14 minutes.
Peter Lovenkrands knocked the ball past advancing goalkeeper Rab Douglas only for Joos Valgaeren to clear off the line.
Rangers made the breakthrough after 23 minutes, when Lovenkrands escaped the attention of John Mjallby and crossed into the box.
The deflected ball evaded Mols and the slipping Valgaeren - and Caniggia was there to side-foot home from 10 yards.
It was two 12 minutes later, when Mols again found Lovenkrands breaking free of his marker and the Dane calmly slotted the ball past Douglas.
Celtic defender Bobo Balde was lucky to escape unpunished when he appeared to aim blows to the head of Lovenkrands and Mols off the ball.
Claudio Caniggia opened the scoring for Rangers at Hampden
O'Neill's side came out strongly in a footballing sense after the break.
They finally got back into the game after 57 minutes, when Larsson met Thompson's inswinging corner at the front post and the ball struck Klos in the face on its way into the net.
Celtic should have drawn level five minutes later, when Larsson pounced on an Arteta error and found Hartson inside the box.
The Welsh striker drove the ball home only to be ruled offside.
Larsson almost produced a carbon copy of his earlier goal after 77 minutes, but this time Klos parried the ball over the bar.
Celtic suffered a double blow when Sutton was stretchered off with a broken wrist then Neil Lennon was sent off for a second yellow card.
They were given a lifeline when Lorenzo Amoruso pulled down Balde, but Hartson drilled his spot-kick wide.
Celtic: Douglas, Mjallby (Petrov 88), Balde, Valgaeren,
Smith (Sylla 66), Lennon, Lambert, Sutton (Maloney 80),
Thompson, Larsson, Hartson.
Subs Not Used: McNamara, Marshall.
Sent Off: Lennon (88).
Booked: Thompson, Lennon.
Goal: Larsson 57.
Rangers: Klos, Ricksen, Amoruso, Moore, Bonnissel (Ross 64),
Caniggia, Arteta (Konterman 78), Ferguson,
de Boer (Arveladze 86), Mols, Lovenkrands.
Subs Not Used: McCann, McGregor.
Goals: Caniggia 23, Lovenkrands 35.
Referee: K Clark.