Swansea closed the gap on second-place Cardiff to three points with a dominant victory at their south Wales rivals.
Marvin Emnes stuck the winner from 20 yards after holding off Gabor Gyepes and firing past Tom Heaton with the aid of a deflection off Mark Hudson.
Scott Sinclair had earlier hit the post for Swansea as the visitors ended Cardiff's five-match winning run.
Craig Bellamy missed a great chance for the home side when clean through and also missed with a free header late on.
Dorus de Vries' save from Bellamy's first opportunity was the only time the Swansea goalkeeper was seriously tested as the on-loan Manchester City star suffered his first defeat as Cardiff captain against their fiercest rivals.
And the Cardiff City Stadium's biggest crowd of 26,049 was stunned into virtual silence when Emnes struck to extend Swansea's unbeaten run to seven Championship games.
The victory was fully deserved and arguably not a surprise as the Swans had lost only once in 10 visits to their closest neighbours.
Cardiff, who had previously enjoyed the longest-winning run in the whole league, were given a warning early on as only a last-ditch lunge from defender Mark Hudson prevented them going behind.
Nathan Dyer cut inside Lee Naylor from the right-wing and teed-up Emnes but the on-loan Dutchman from Middlesbrough fired his shot at the diving Hudson from 10 yards.
Dyer again twisted and turned Naylor inside out for Swansea's second clear-cut opening after sprinting onto Andrea Orlandi's cute pass behind Naylor but Cardiff keeper Heaton palmed away his near-post drive.
Free-scoring Cardiff were reduced to half-chances as Swansea dominated the first half in their trademark pass and move style.
But the pace of the Bluebirds counter-attack was showcased when Andy Keogh, in for suspended talisman Jay Bothroyd, quickly broke to set-up their first clear sight of goal.
The Swans defence held off striker Keogh's rampaging run but the Irish international fed Peter Whittingham whose 25-yard left-footer just whistled past de Vries' left-hand post.
Cardiff were missing top-scorer Bothroyd's physical presence and link-up play as much as his goals, and they were fortunate not to fall behind when Swansea's top scorer Scott Sinclair sped past full-back Kevin McNaughton and crossed for Emnes, who headed over from eight yards.
The home side were struggling to get a foothold in the 59th meeting between the two rivals until a goalmouth scramble led to Cardiff's clearest opening of the half - and a penalty appeal.
Naylor's cross went loose in the penalty area where Danny Drinkwater and Craig Bellamy got in each other's way but the ball rolled to Michael Chopra who fired goalwards from eight yards.
Cardiff's record-signing was foiled by a heroic block from Alan Tate and although the home side claimed the ball had struck his arm, referee Mike Jones ruled the defender's stomach had taken the full force of the goalbound shot.
Swansea's control of possession and territory continued into the second period and when Sinclair was fed by Emnes, his low shot from 20 yards was finger-tipped onto his left-hand post by Heaton.
The Cardiff stopper was again in action when he parried Joe Allen's long-range strike but covering defender Gabor Gyepes had to be alert that Emnes did not pounce on the rebound.
Gower and Sinclair again tested Heaton but the busy Cardiff keeper set-up probably the best goal-scoring chance of game when the subdued Bellamy dashed onto a long punt upfield.
Angel Rangel's error of judgement let the Cardiff skipper in but Bellamy, with just de Vries to beat, shot straight at the Swans keeper who pushed wide - before Hudson headed the subsequent corner wide.
With 16 minutes remaining, Swansea scored the goal their play deserved when Emnes showed why Middlesbrough once paid £3.2m for him.
He shielded Allen's pass from Gyepes and Drinkwater and with his back to goal, swivelled to fire left-footed past Heaton from the edge of the box with the aid of a slight deflection Hudson.
Swansea held on despite a late Cardiff onslaught - and Bellamy's last-gasp header wide - to protect a goal that has not been breached for nine hours and underline their credentials as genuine contenders for promotion to the Premier League.