Manuel Pellegrini's City underlined their status as kings of Manchester after they brushed aside David Moyes' United 3-0 with alarming ease at Old Trafford.
Edin Dzeko scored after just 42 seconds to put City ahead and the big striker struck again after the break before Yaya Toure rounded off yet another miserable night for Moyes.
Further questions will surely be asked about Moyes' ability to bring the glory days back to United.
There was no fortune about this victory from Pellegrini's team, who are now three points off the top of the Barclays Premier League with two games in hand on Chelsea.
If anything, it was a minor miracle that City did not win by four or five.
David Silva, Toure, Fernandinho and Samir Nasri overran and outclassed a weak United midfield and Dzeko - a surprise starter ahead of Alvaro Negredo - did the rest up front.
It seems, after all, that Pellegrini had a point when he said there has been only one club in Manchester this year.
United lacked confidence, tempo and cohesion. There was no cutting edge up front while the back line was exposed for its lack of pace, just as was the case against Liverpool.
Moyes made life easy for the visitors too. Antonio Valencia was left on the bench and Adnan Januzaj did not even make the squad, leaving United with no width at all.
Moyes placed his faith in Tom Cleverley as has been common in the big games this year, and once again the England midfielder failed to deliver.
Things could have been worse had Marouane Fellaini received the red card he deserved for an elbow on Pablo Zabaleta or had David de Gea not prevented Dzeko scoring his third with a superb save.
There were plenty of glum faces by the final whistle, and one of them was Moyes'. The statistics do not make for good reading for the Scot.
United are now guaranteed to end the season with their lowest points total in Premier League history.
They have been defeated in six home games for the first time since 1978 and they have now lost three successive derbies for the first time in 45 years.
All the noises coming out of Old Trafford before the match were positive.
Sir Bobby Charlton said Moyes was "absolutely the right man" for the job.
Moyes wrote in his programme notes that it would not be long before United came through their "tricky period" and rose again.
The United boss said his team were not as far behind City in terms of quality as the table suggested, but that theory was shot to bits in the opening minute.
Toure sliced open the home defence to find Silva, who would have put City ahead had it not been for a decisive intervention from Rafael.
If United thought the trouble had passed then they were wrong. The cleared ball fell to Fernandinho, who found Nasri in acres of space in the box. The Frenchman's shot beat a stationary De Gea and the ball fell to Dzeko, who was left with the simplest of tap-ins.
Moyes sat there looking glum while the away fans proclaimed the Scot a "football genius".
For the rest of the opening quarter, United simply could not get hold of the ball. Silva penetrated the defence but fluffed his shot from 12 yards.
Dzeko slid the ball across the box, but Rafael was there to intercept again.
Silva snuck in behind the United back four again and squared for Dzeko, who placed his shot towards the bottom right-hand corner, but De Gea stuck out a hand and saved.
United fans, so supportive this season despite their team's failings, vented their anger as City's attack strolled towards the home defence unchallenged in attack after attack.
Joe Hart was twice called into action, but only to save weak shots from Wayne Rooney and Fellaini.
Fellaini then blotted his copy book by elbowing Zabaleta. He was lucky to get away with a booking.
United had one more chance before the break, but Rooney's fresh-air swipe from Rafael's simple pass summed up the hosts' first half.
Moyes brought on Shinji Kagawa for Cleverley at the break but it had no effect on the game.
Fernandinho headed over from six yards, but Dzeko made no such mistake soon after.
Fellaini blocked Rio Ferdinand's path as he tracked Dzeko and he was left unchallenged to head past De Gea.
United threatened momentarily through Welbeck, whose backheel was saved by Hart from point-blank range.
More substitutions came but nothing changed. Moyes sat in his seat dejected as Toure drove the ball beyond De Gea from 16 yards to wrap up the win in the final minute
DZEKO: WIN CRUCIAL FOR TITLE HOPES
Edin Dzeko believes Manchester City's resounding derby victory over Manchester United will prove "crucial" to the outcome of their Barclays Premier League title bid.
The Bosnian striker scored after only 45 seconds at Old Trafford and again in the second half before Yaya Toure rubber-stamped the three points and ensured another chastening night for David Moyes' troubled United.
City are now only three points behind leaders Chelsea and have two games in hand, but Dzeko believes the Blues, Liverpool and Arsenal will still provide serious competition over the run-in.
He told Sky Sports 1: "I think before the game we had three games less than Chelsea and this game was very important for us. Now we are only three points behind and still two games less.
"This game could be crucial at the end of the season.
"I think there are four teams that want to win the title and everyone's got a chance. There are still eight or so games so everything's to play for."
United were chasing the game before a minute had been played after Dzeko converted from close range and although City might have pulled further clear before the break, they asserted their authority following the restart.
Dzeko added: "I think it was an amazing game for us from the first to the last minute. We were amazing.
"We just wanted to start playing our game from the first minute, playing them high and trying to score an early goal, which we did.
"Then it was all about us.
"There could have been another one (an early goal) but we got two in the second half so we have to be happy."