In a game that sprung to life after a first half of limited opportunities, Chelsea were left to rue a saved Frank Lampard penalty when Yaya Toure gave the home side the lead soon after. Substitute Carlos Tevez sealed the result with a late strike.
Manchester City came the closer to finding the net in the first half, Petr Cech and a series of blocks by the Chelsea defence with Gary Cahill to the fore keeping Roberto Mancini's men at bay.
There was more threat to Chelsea's play in the more open second half but we continued to look vulnerable to City's attacking moves, although had Lampard found the net when Demba Ba was fouled in the area shortly after the break, the home team's confidence after their recent shaky run of results might have been in question.
Instead it took a good strike to open the scoring at the other end and from that moment on the points looked destined to go to the second-placed side. Chelsea remain in third but one point ahead of Tottenham who play away at West Ham tomorrow.
Ashley Cole returned to the side and made his 300th Chelsea appearance. David Luiz played in central defence for the first time since the home draw against Southampton last month. Cahill partnered the Brazilian and with John Terry on the bench, the returning Lampard was captain.
Ramires was asked to start wide in an attacking role, up against Man City left-back Gael Clichy, with Eden Hazard on the Chelsea left flank. Ba led the attack.
Man City captain Vincent Kompany was unfit so Kolo Toure and Matija Nastasic were their central defence. Sergio Aguero was the most central striker with Yaya Toure and David Silva playing in advanced positions.
The Stamford Bridge meeting between these sides, Rafael Benitez's first game in charge of Chelsea, had been a stalemate and the first 45 minutes of this encounter followed a similar pattern.
In a measured opening by both sides, the first attack of promise from Chelsea came when Hazard passed wide to Ba, who won a corner. Man City's early threat was mostly from the mobile Yaya Toure, operating primarily wide on the left in the early stages. A very early shot from the Ivorian had been too tame to worry Cech.
Man City won a 13th minute corner after Hazard had given the ball away in trying to play out from the back and Silva's delivery was met by the head of Nastasic. Cech, with little time to react, did very well to block it on his line. Aguero was offside as he tried to follow up.
That began a spell of sustained pressure by the home side. Cahill blocked a shot from Yaya Toure and then another shortly after from Rodwell. Then, after the ball had been lost in midfield, Silva's pass allowed Aguero to spring forward but although he took the ball past Cech, he also took it over the by-line for a goal kick.
Ramires in action against Man City
Chelsea improved around the midway point in the half and forced Man City onto the back foot for the first time in the game, but couldn't test Joe Hart. Lampard was well off-target with a 30-yard free-kick.
Rodwell, who had earlier escaped a booking for a foul on Ramires, was the first to go into the book for pulling down Ivanovic by the touchline.
There was a promising move down the left involving Hazard and Mata but the Spaniard was tackled inside the City area. As the home team broke, Ramires fouled Yaya Toure at the expense of a yellow card.
One of the best moves of the half cut the Chelsea defence open as Milner found Aguero's run in behind Ivanovic, but when Zabaleta powerfully volleyed the cross at goal, Cahill headed it away. The Chelsea defender was making a habit of being in the right place at the right time this afternoon.
City were looking for a goal before the break and Cech twice denied Rodwell in the space of a minute; the first time tipping a shot over and then catching a header from the corner that followed.
John Mikel Obi in action against Man City
Zabaleta was booked for a trip on Cole. The first-half foul count was Man City 13, Chelsea 1.
Just before the break, the tenacious Hazard broke free of a challenge and then tricked his way into space but when he played a pass on to Ramires in the box, the Brazilian couldn't get the better of Clichy. The goalless first half came to an end moments later.
Twice in the first two minutes after the break, Man City got in behind the right-hand side of the Chelsea defence. Aguero, from the second cross, made good contact with a difficult volley with his back to goal but thankfully the shot went wide.
On 49 minutes Hazard struck Chelsea's first shot on target in the game. Hart, with time to watch it, saved low down.
On 51 minutes came one of the game's big moments. Ivanovic struck a diagonal pass into the area and as Ba took it wide on the outside of Hart, the keeper brought the Chelsea man down. Kolo Toure had shoved Ba seconds before anyway. The ref pointed to the spot. Ba had not been moving towards goal so a red card was not a possibility.
Demba Ba wins a penalty against Man City
Lampard, on the verge of 200 goals, hit his penalty low to the left but a keeper he has faced many times in England training sessions saved well. Cahill headed the corner that followed just over.
This half was shaping up very differently from the first period in terms of incident. More good defending by Cahill kept the City attack at bay but then the defender let Aguero in behind him, only for the Argentinian to chip his shot onto the roof of the net.
It was attack and counter-attack. The unlikely pair of Ramires and Ivanovic led one break forward but when Ramires was found in the centre by the Serbian's pass, he allowed Kolo Toure to muscle him off the ball.
City went straight up the other end and scored. Yaya Toure had been playing deeper since Carlos Tevez's introduction for Rodwell early in the half. Silva played the ball back to him on the edge of the area and his first touch took him round the outside of Mikel. With a yard of space to exploit, Toure curled a shot low beyond the reach of Cech. It took a slight deflection but it was a good individual goal. There were 62 minutes played.
Rafael Benitez made a double substitution five minutes later - Moses replacing Lampard and Oscar on for Hazard. Torres came on for Mikel with 10 minutes left to play. David Luiz moved into midfield with Ivanovic switching to central defence and Ramires to right-back. We were now playing with two men up front.
On 84 minutes the home side put the game to bed when Aguero made inroads against the reshaped right-hand side of Chelsea's defence and played a pass back to Tevez. From 25 yards out, the substitute arrowed a shot past Cech.
Chelsea (4-2-3-1): Cech; Ivanovic, Cahill, David Luiz, Cole; Mikel (Torres 81), Lampard (c) (Moses 68); Ramires, Mata, Hazard (Oscar 68); Ba.
Unused subs Turnbull, Azpilicueta, Terry, Bertrand.
Booked Ramires 36.
Man City (4-3-2-1): Hart; Zabaleta (c), K Toure, Nastasic, Clichy; Milner, Javi Garcia, Rodwell (Tevez 54); Silva (Lescott 90+2), Y Touré; Agüero (Nasri 90).
Unused subs: Pantilimon, Kolarov, Sinclair, Džeko.
Scorers Y Toure 62, Tevez 85.
Booked Rodwell 28, Y Toure 39, Zabaleta 42.
Referee Andre Marriner