Julian Belletti and Michael Ballack both saw red as Chelsea missed a chance to extend its one-point lead over defending champion Manchester United with 10 matches to go.
After Frank Lampard fired Chelsea ahead, Carlos Tevez and Craig Bellamy each scored twice for City. Lampard scored another in the 90th minute from the penalty spot, but it couldn't prevent Chelsea losing for the first time in all competitions at Stamford Bridge since November 2008.
By completing its first league double over Chelsea since 1957, City moved back into fourth place and relieved the pressure on manager Roberto Mancini, who had won just four of his last 11 games before prevailing in west London.
Third-place Arsenal was at Stoke in the late match, while Manchester United is contesting the League Cup final against Aston Villa on Sunday.
Also Saturday, bottom-place Portsmouth beat Burnley 2-1 one day after being the first Premier League club to be forced to seek bankruptcy protection. Bolton climbed out of the relegation zone with a 1-0 victory over Wolverhampton and Birmingham kept its European hopes alive by beating Wigan by the same score.
All the intrigue Saturday was focused on the clash of the league's two wealthiest clubs - Chelsea and Man City - and the ill-feeling between Wayne Bridge and Chelsea captain John Terry.
They came face to face for the first time since allegations surfaced about an affair between Terry and the mother of his former Chelsea teammate's son. In the pre-match fair play formalities, Bridge refused to shake hands with Terry, who was stripped of the England captaincy as a result of his affair with Vanessa Perroncel.
For Bridge, ensuring City finishes in the top four and qualifies for the Champions League became the priority after the left back announced his international retirement on Thursday, saying his position in the England team was “untenable.” City has a three-point lead over Tottenham and is an extra point ahead of Liverpool, with the trio having all played 27 matches.
But City had to recover after conceding three minutes before halftime when Lampard ran onto Joe Cole's pass and slotted past Shay Given.
Tevez ensured City was level at the break, by turning Terry then scuffing a shot that managed to beat goalkeeper Henrique Hilario and clinch City's first goal at Chelsea since 2000.
Six minutes into the second half, Bellamy broke from the halfway line and managed to score under Hilario, who was filing in for the injured Petr Cech, from a tight angle.
Belletti was sent out for fouling Gareth Barry and Tevez netted the resulting spot kick in the 76th minute.
Ballack was next to go after receiving a second yellow card for a foul on Tevez.
And with huge holes in the Chelsea defense as the home side pushed for a goal, Bellamy tapped in City's fourth at the far post after Shaun Wright-Phillips squared to the Welshman.
Chelsea did reduce the deficit courtesy of Lampard's penalty kick after Nicolas Anelka was brought down by Barry.
“It was not a good day,” Chelsea manager Carlo Ancelotti said. “The only good thing from today is that we still have one point more than Manchester United. We have more chance to win the title than either them or Arsenal because that is what the table says.” At the wrong end of the standings is Portsmouth, which is set to be docked nine points for entering financial administration. But for now, Portsmouth closed the gap on 19th-place Burnley to four points by winning at Turf Moor.
Hassan Yebda scored from the penalty spot after Burnley's Martin Paterson had equalized following Frederic Piquionne's opener for the south-coast club. Portsmouth lost Ricardo Rocha toward the end of the match when he was shown a second yellow card.
