Birmingham City ended their barren home run with a late two-goal burst from Jeff Kenna and Mikael Forssell.
For a long time it appeared as if Manchester City would record a long overdue win, but a determined Birmingham clawed a dramatic win.
Robbie Fowler scored only his second Premiership goal of the season to give Kevin Keegan's side a 13th minute lead and Manchester City battled for long and hard before Kenna popped up with his face-saving equaliser which sparked off a frantic finish.
Manchester City, now without a win in ten games, counted themselves unlucky to lose as Forssell's winner occurred when Richard Dunne attempted to clear a Robbie Savage free-kick.
The ball, however, smashed against Forssell and past a helpless David Seaman to give Birmingham their first home win since the end of September.
The visitors' determination to gain the upper hand was observed in several dangerous attacks with Birmingham under pressure attempting to repel their big money opposition.
In this early period Savage collected the first booking of the game for a rough tackle on Fowler.
Birmingham's lack of depth in their squad proved to be a costly as they were forced to employ Australian international Stan Lazaridis in a defensive role.
The winger was exposed by the sprightly Shaun Wright-Phillips as early as the 13th minute and proved to be extremely costly.
In persistent rain Wright-Phillips outpaced Lazaridis and produced an accurate low cross which Fowler was able to head home as he moved onto the centre from the right.
As to be expected in the circumstances Kevin Keegan's side were forced to drop back onto the defensive in their bid to maintain their surprise lead.
But Birmingham lacked the attacking penetration to break through Manchester City's fragile defence at this stage.
This was seen early in the second period when Birmingham went all out to grab the equaliser. Clinton Morrison cut in from the right, but Forssell failed to make a connection.
Nicolas Anelka attempted to ease the pressure when he managed to get a shot on target, but his effort was well-saved by Maik Taylor to keep Birmingham in the game.
The disturbing aspect of Birmingham's latest display was another disappointing performance from David Dunn, who was replaced by Jovan Kirovski early in the second half.
But Birmingham's late burst occurred when a Savage free-kick ten minutes from time hit the post and Kenna headed home the rebound.
Another Savage free-kick in the closing stages also had Manchester City in all sorts of trouble with Forssell blocking Dunne's intended clearance which sailed past Seaman.