In what was arguably their best performance of the season, Ilkay Gundogan, Phil Foden, and Kevin De Bruyne struck apiece in the first half as the Blues lost for the fourth time in the last six games.
Callum Hudson-Odoi came off the bench and struck in stoppage time to reduce the deficit, but it was nothing more than just a consolation strike as further pressure mounts on manager Frank Lampard.
The defeat leaves Chelsea in eighth with just 26 points after 17 games, whereas City climb up to fifth with a game in hand.
Let's take a look at the hits and flops.
Hit: Phil Foden (Manchester City)
Despite his impressive record in all competitions, Foden hasn't really hit the ceiling in the Premier League this season, but he well and truly upped the ante tonight.
With a goal and an assist to his credit, the 20-year old Manchester City fireball left the Blues in the dust.
He assisted Gundogan for the opener with a simple pass after brilliantly controlling De Bruyne's cross, before nonchalantly rounding off the Belgian's another floating cross from the near post.
Even though Foden's impact waned slightly after the break, his energy and off-the-ball movements were a constant source of concern for the home side.
Flop: Timo Werner (Chelsea)
There's more to Werner's game that is concerning than just the lack of goals. Because far from even finding the net, the German left a lot to be desired with his work rate too.
When the Skyblues cut a swathe through Chelsea in the first half, he stationed himself far up the field in the hopes of receiving service.
He didn't get himself involved in trying to regain possession or even drift out of his position to help out his teammates on the flanks.
Even though the ex-RB Leipzig striker was relatively more active after the break, there was nothing to write about his performance overall.
Werner's drought in the Premier League now extends to nine games, and that should worry Lampard and Chelsea.