Manchester City s Erling Haaland celebrates after scoring his side s opening goal from a penalty kick during the English Premier League soccer match between Manchester United and Manchester City at Old Trafford stadium in Manchester, England, Sunday, Oct. 29, 2023. AP
Haaland slotted home from the penalty spot midway through the first half and headed in a second just after half-time before setting up Phil Foden for City's third.
City began the match outside the top four after an indifferent start to their title defence.
But Pep Guardiola's men remain the favourites for an unprecedented fourth consecutive English top-flight title and showed they are a class apart from their local rivals as they moved up to third.
A fifth defeat in 10 league games this season leaves United down in eighth, 11 points off the top.
United great Bobby Charlton was again remembered before kick-off as legends from both clubs that played with and against the 1966 World Cup winner were welcomed onto the pitch before a minute's applause.
But hostilities were restored once the action got underway.
After a miserable start to the season, United had won their previous three games but in unconvincing fashion against Brentford, Sheffield United and FC Copenhagen.
This was the real test of any renaissance by Erik ten Hag's men and they were found wanting despite City taking 45 minutes to hit their stride.
Andre Onana's penalty save with the last kick of the game to keep United's Champions League challenge alive against Copenhagen in midweek could prove to be the turning point in the Cameroonian goalkeeper's career at Old Trafford.
But for the former Inter Milan stopper, United would have suffered an even more embarrassing afternoon.
Onana had to be at his best once more to bail out some shoddy defending as he parried Foden's header and denied Haaland from the follow-up before Harry Maguire hacked clear off the line.
However, he could not repeat his heroics from the penalty spot when VAR intervened to award City their first penalty at Old Trafford since 1992.
Rodri was clearly hauled back by Rasmus Hojlund, but United will complain that similar incidents often go unpunished for jostling inside the box.
Haaland has attracted some criticism of late for not meeting his usually sky high standards in front of goal.
But the Norwegian now has 11 in 10 Premier League games this season and sent Onana the wrong way from the spot.
Hojlund had a huge chance to make amends as he pounced on a slack Foden pass to burst clear on goal.
But the Dane took a heavy touch as he rounded Ederson and his ball back across goal was fired over by Bruno Fernandes.
City boss Pep Guardiola was growing visibly frustrated as his side's uncharacteristically poor passing handed United chances to counter-attack and Scott McTominay stung Ederson's palms with a big chance to equalise.
But the visitors would still have led 2-0 by the break but for a remarkable stop from Onana to turn Haaland's powerful header over.
United did not heed that warning as City did double their lead four minutes into the second half with a carbon copy move.
Bernardo Silva was played in down the left and his cross was this time met by a more cushioned header from Haaland beyond Onana.
City then took complete control and only another fine save from Onana denied Haaland his second Manchester derby hat-trick when clean through.
But City's number nine unselfishly squared with his next chance to claim the match ball to tee up Foden for a simple tap-in after Onana parried Rodri's initial effort.
The third goal was the cue for thousands of United fans to head for the exits, but not before many had showed their displeasure with Ten Hag's decision to take off Hojlund.
After an impressive first season in charge, the pressure is growing on Ten Hag to turn around a sinking ship.
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