Robin van Persie and Wayne Rooney — United's in-form strike partnership — teamed up to preserve United's six-point lead, both scoring at Old Trafford to add to a sublime strike by midfielder Tom Cleverley.
City recovered from its agonizing derby loss to United last weekend by winning at St. James' Park, courtesy of goals by Sergio Aguero, Javi Garcia and Yaya Toure, but United's victory ensures Alex Ferguson's side will be top at Christmas.
"Some of our football was very good and we could have scored lots of goals," Ferguson said. "We will try and keep the momentum going and consistency going."
Liverpool's resurgence was ended with a surprise 3-1 home loss to Aston Villa, Everton drew 1-1 at Stoke in a match marred by an apparent headbutt by visiting midfielder Marouane Fellaini on Ryan Shawcross, and Queens Park Rangers climbed off the foot of the table by beating Fulham 2-1 for its first victory in 17 matches this season.
"At least it keeps us in there," QPR manager Harry Redknapp said. "If we hadn't won today, it would have been absolutely desperate."
Reading occupies the bottom spot ahead of its home match against Arsenal on Monday.
Also on Saturday, Norwich claimed a fifth straight home win by beating Wigan 2-1, lifting the team into seventh place and just two points off the Champions League positions.
With Van Persie and Rooney firing in the goals, United looks an unstoppable force at present.
Van Persie's 12th goal of the season — the equal-highest in the league with Swansea midfielder Michu — set the 20-time champions on their way in the 16th minute and Cleverley made it 2-0 three minutes later. Van Persie set up Rooney to wrap up the win in the 59th minute, giving United breathing space and Ferguson an opportunity to substitute in captain Nemanja Vidic for his first game since September.
"It will take him a bit of time but that is a start," Ferguson said. "He is a warrior and he is our captain."
Frazier Campbell's 72nd-minute consolation against his former club sparked a late fightback by Sunderland that didn't produce any more goals.
City had put the pressure on hours earlier, producing some fine football to take a 2-0 lead at halftime through Aguero's tap-in and Garcia's header from a corner.
The champions conceded a header by Demba Ba early in the second half and then had to weather an onslaught by Newcastle before Toure clinched victory 12 minutes from time.
"It's important because when you come from a defeat — any defeat, but particularly against United — it's important to start to win quickly, and we started here, where I don't think a lot of teams can win," City manager Roberto Mancini said.
"The season is long. He (Ferguson) knows football better than me. He knows that this championship is not finished."
Fellaini, one of the league's top players this season, may have landed himself in trouble with the Football Association after appearing to headbutt Shawcross to the ground as they jostled during a second-half corner.
"I've seen it, it's a terrible thing to do and I expect him to be punished," Everton manager David Moyes said.
The incident overshadowed a match that saw Shawcross gift Everton the lead with an own goal in the 36th minute, before Kenwyne Jones equalized in the 52nd.
Everton could have moved level on points with third-place Chelsea, which is on Club World Cup duty in Japan, with a win at Britannia Stadium.
Christian Benteke was Liverpool's tormentor at Anfield, scoring twice and setting up Andreas Weimann for Aston Villa's other goal with an audacious backheel.
Steven Gerrard grabbed a late consolation for Liverpool but the result made a mockery of manager Brendan Rodgers' pre-match assertion that his team could challenge for a top-two spot this season.
"I don't know where that came from as it's not been like us," said Rodgers, whose team dropped back into the bottom half of the table. "We will have to take that as a bad day at the office and move on."
Enigmatic Morocco winger Adel Tarrabt scored both of QPR's goals at Loftus Road, as the hosts ended their winless start to lie just five points adrift of safety.
"He has the ability to be up there with the best," said QPR manager Harry Redknapp, who also claimed a first win in charge of the London club. "I thought it was one of the all-round great individual performances."