Sergio Aguero scored twice as Carlos Tevez netted his first goal since May 2011 and David Silva returned to form allowing City to go within five points of United who were beaten 1-0 at Wigan Athletic.
It was a dominant performance from Roberto Mancini's men who on Sunday looked almost down and out after putting in an insipid display at Arsenal but this could be the tonic they need to regain that early-season form which made them unbeatable.
Aguero kicked things off in just the sixth minute with a sublime goal after picking up possession in City's defensive half before making a strong run and then firing a low shot past Ben Foster from 25 yards to make it 1-0.
That lead was doubled less than minutes into the second half when the Argentine ace received a nice through ball from Samir Nasri to slot home and soon enough it was 3-0 when Tevez, who started, knocked home Aguero's cutback to essentially wrap up proceedings.
But City weren't done there as a fourth goal came in the 64th minute when Silva received a ball from Aguero to expertly chip over an advancing Foster for his first Premier League goal since December.
It was very good signs for City supporters who would have thought the clubs title hopes had slipped away but with a victory like this and a loss of the magnitude of United's, the race is still very much on.
TRIBAL ASKS: Will tonight's exploits give City the impetus to push on and place more pressure on United?
Etihad Stadium, Manchester - 46,736
Yellow cards:MANC - nil WBA - nil