United were reduced to 10 men when Jonny Evans was sent off early in the second half but City's superiority was such that they looked on course for a landmark victory from the moment they took the lead.
Sergio Aguero added a third and, even though Darren Fletcher pulled a goal back, this only proved the signal for a late surge by City that brought three more goals and a result that will have sent shockwaves through the Premier League.
Substitute Edin Dzeko scrambled in a fourth and the magnificent David Silva ran clear to add another, before the Bosnian striker inflicted the final wound seconds from the end.
in Manchester derby since 1926
of victory in Manchester derby
in Premier League match
in Premier League
at Old Trafford since 1955
at home since 1930
As Ferguson strode briskly towards the Stretford End at the final whistle, he will have been reflecting on the extent of the challenge now facing him from the club he once branded "noisy neighbours".
To increase United's pain, this was their first home defeat in any competition since April 2010, when they lost to Chelsea - but even that defeat, which effectively cost them the title, may not turn out to have the same long-term significance as this heavy beating.
United's stature is such that one result must not bring the immediate announcement of a shift in the balance of power in Manchester - but the swathes of empty seats around Old Trafford and the wave of attacks pouring towards David de Gea's goal in the second half emphasised that City quite simply have greater firepower and talent in their squad at present.
Mancini left Samir Nasri and Dzeko on the bench - but was still able to exploit a wide range of attacking options in Balotelli, Silva and Aguero.
In contrast to what was to come, City were barely allowed any time to settle on the ball in the opening exchanges, with Ashley Young prominent and drawing heavy fouls from Micah Richards and James Milner.
And it was against the run of play that City took the lead after 22 minutes, courtesy of a stroke of casual quality from Balotelli. Silva was the creator but Balotelli, given too much time and space by Evans, finished sublimely with a stroked finish into the bottom corner.
A terrible defeat - Sir Alex Ferguson
Balotelli, in recognition of those latest chaotic events in his personal life, then revealed a T-shirt bearing the slogan "Why Always Me?". Despite the evident good humour of the gesture, he was booked by referee Mark Clattenburg.
United's hopes of mounting a serious response suffered a blow within two minutes of the restart when Evans, who had endured a miserable afternoon, lost concentration and allowed Balotelli to steal in behind him. The defender's only reaction was to haul the Italian down, resulting in an inevitable red card.
The opportunity was there for City to overpower their arch-rivals and they accepted it as they went in search of further goals to emphasise their supremacy.
City doubled their lead on the hour with another superbly created goal finished by Balotelli. Silva cleverly played in Milner, who provided a cross that left the striker with the simplest of goals from close range.
Aguero had been quieter than his attacking colleagues but got in on the act after 69 minutes. The outstanding Milner played in Richards and, once again, a delivery across the face of the goal proved too much for United, Argentine Aguero arriving to complete the formalities.
Mancini then removed Balotelli and introduced Dzeko, who almost scored a fourth within seconds of his arrival, only to see his shot drift inches wide.
And, with United chasing a lost cause and leaving space at the back, Silva fired over from 10 yards and Dzeko forced a fine save from De Gea when he was set free by the Spaniard.
HEAD TO HEAD
Correct at 23 October 2011
6-1 (1926, 2011)
United refused to give up even in the face of impossible odds and Fletcher offered some hope when he pulled one back with nine minutes left, striking a fine rising shot from 20 yards that gave Joe Hart no chance.
It was a goal for which the phrase "false dawn" was invented. Dzeko took advantage of good work from Joleon Lescott to score the fourth before Silva got the goal he deserved with a composed strike.
And with some United supporters actually pleading with referee Clattenburg to put them out of their misery, one more moment of brilliance from the magical Silva found Dzeko surging into the area to finish left-footed for his second.
Goal! - Edin Dzeko - Man Utd 1 - 6 Man City Goal scored by Edin Dzeko from the edge of the penalty area low into the middle of the goal. Man Utd 1-6 Man City.
Shot by Edin Dzeko from deep inside the six-yard box clear the bar.
Edin Dzeko provided the assist for the goal.
90:00 +0:08 Goal scored
Goal! - David Silva - Man Utd 1 - 5 Man City David Silva gets on the score sheet with a goal from inside the six-yard box low into the middle of the goal. Man Utd 1-5 Man City.
Assist on the goal came from Joleon Lescott.
89:02 Goal scored
Goal! - Edin Dzeko - Man Utd 1 - 4 Man City Edin Dzeko scores a goal from close range to the bottom right corner of the goal. Man Utd 1-4 Man City.
Inswinging corner taken from the left by-line by David Silva,
Substitution Aleksandar Kolarov comes on in place of James Milner.
Gnegneri Toure Yaya produces a right-footed shot from the edge of the box and misses to the left of the goal.
Phil Jones crosses the ball, Joe Hart makes a save.
The ball is crossed by Darren Fletcher, Headed effort from inside the area by Chris Smalling misses to the left of the goal.
Ashley Young crosses the ball from the free kick right-footed from left wing.
Booking Micah Richards shown a yellow card.
Micah Richards gives away a free kick for an unfair challenge on Danny Welbeck.
Foul by Gareth Barry on Ashley Young, free kick awarded. Chris Smalling takes the direct free kick.
The ball is delivered by Samir Nasri, Rio Ferdinand makes a clearance.
Samir Nasri takes the free kick.
Booking Danny Welbeck receives a caution for unsporting behaviour.
Free kick awarded for a foul by Danny Welbeck on Micah Richards.
The assist for the goal came from Javier Hernandez.
80:05 Goal scored
Goal! - Darren Fletcher - Man Utd 1 - 3 Man City Darren Fletcher finds the back of the net with a goal from just outside the box to the top right corner of the goal. Man Utd 1-3 Man City.
Direct free kick taken by David Silva.
Booking Caution for Chris Smalling.
Unfair challenge on Edin Dzeko by Chris Smalling results in a free kick.
David Silva takes a inswinging corner from the right by-line played to the near post, clearance made by Chris Smalling.
Edin Dzeko takes a shot. Save by David De Gea.
Joe Hart takes the indirect free kick.
Substitution Sergio Aguero goes off and Samir Nasri comes on.
The referee blows for offside against Ashley Young.
David Silva produces a left-footed shot from close in that goes over the bar.
The ball is sent over by Darren Fletcher, Danny Welbeck takes a shot. Blocked by Micah Richards.
A cross is delivered by Darren Fletcher, clearance made by Micah Richards.
Joleon Lescott concedes a free kick for a foul on Ashley Young. Free kick crossed by Ashley Young, Edin Dzeko makes a clearance.
Effort from inside the area by Edin Dzeko misses to the right of the goal.
Micah Richards restarts play with the free kick.
Substitution Edin Dzeko joins the action as a substitute, replacing Mario Balotelli.
Unfair challenge on Mario Balotelli by Patrice Evra results in a free kick.
Assist by Micah Richards.
68:03 Goal scored
Goal! - Sergio Aguero - Man Utd 0 - 3 Man City Sergio Aguero finds the net with a goal from close in low into the middle of the goal. Man Utd 0-3 Man City.
Micah Richards crosses the ball,
Patrice Evra challenges Gnegneri Toure Yaya unfairly and gives away a free kick. Gnegneri Toure Yaya takes the direct free kick.
Booking Patrice Evra is shown a yellow card.
Ashley Young takes a outswinging corner from the right by-line played to the near post.
Substitution Phil Jones comes on in place of Oliveira Anderson.
Substitution Javier Hernandez on for Luis Nani.
David Silva delivers the ball, blocked by Chris Smalling.
Short corner worked by James Milner.
David Silva takes a shot. Chris Smalling gets a block in.
Gnegneri Toure Yaya takes the free kick.
Booking Oliveira Anderson is shown a yellow card for unsporting behaviour.
Oliveira Anderson concedes a free kick for a foul on Sergio Aguero.
Assist by James Milner.
59:33 Goal scored
Goal! - Mario Balotelli - Man Utd 0 - 2 Man City Mario Balotelli finds the net with a goal from close range low into the middle of the goal. Man Utd 0-2 Man City.
Centre by James Milner,
Free kick awarded for a foul by Patrice Evra on Micah Richards. Direct free kick taken by James Milner.
Wayne Rooney takes a shot. Comfortable save by Joe Hart.
Corner taken left-footed by Oliveira Anderson, clearance made by Micah Richards.
Chris Smalling takes a shot. Joleon Lescott gets a block in.
Centre by Luis Nani, Micah Richards manages to make a clearance.
Corner taken short by Ashley Young.
Ashley Young takes a shot. Blocked by Vincent Kompany.
A cross is delivered by Patrice Evra, blocked by Vincent Kompany.
The ball is swung over by James Milner.
Ashley Young takes a shot. James Milner gets a block in.
Micah Richards produces a left-footed shot from deep inside the penalty box which goes wide of the left-hand upright.
Free kick awarded for an unfair challenge on Sergio Aguero by Darren Fletcher. Free kick taken by Gnegneri Toure Yaya.
Direct effort from the free kick comes in from Mario Balotelli.
Dismissal Jonathan Evans is sent off by the referee.
Jonathan Evans challenges Mario Balotelli unfairly and gives away a free kick.
The game restarts for the second half.
45:00 +1:08 Half time
Half Time The referee calls an end to the first half.
Unfair challenge on Gael Clichy by Chris Smalling results in a free kick. Joe Hart takes the free kick.
Free kick awarded for a foul by Gnegneri Toure Yaya on Ashley Young. Oliveira Anderson restarts play with the free kick.
Luis Nani challenges Gael Clichy unfairly and gives away a free kick. David Silva takes the direct free kick.
Foul by Chris Smalling on Mario Balotelli, free kick awarded. Gael Clichy takes the direct free kick.
Shot from just outside the box by Oliveira Anderson misses to the left of the goal.
Darren Fletcher takes the direct free kick.
Booking Booking for Vincent Kompany for unsporting behaviour.
Vincent Kompany concedes a free kick for a foul on Danny Welbeck.
The ball is delivered by Sergio Aguero, Rio Ferdinand gets a block in.
Pass corner from left by-line taken by Ashley Young to short.
Chris Smalling crosses the ball.
Oliveira Anderson challenges David Silva unfairly and gives away a free kick. Mario Balotelli fires a strike on goal direct from the free kick, Wayne Rooney gets a block in.
Wayne Rooney takes a shot. Save by Joe Hart.
Patrice Evra challenges Mario Balotelli unfairly and gives away a free kick. David Silva crosses the ball in from the free kick.
Oliveira Anderson takes a shot. Save by Joe Hart.
Corner taken by Ashley Young from the left by-line, save by Joe Hart.
Ashley Young sends in a cross, blocked by Micah Richards.
Luis Nani crosses the ball, Gael Clichy gets a block in.
Micah Richards concedes a free kick for a foul on Ashley Young. Ashley Young takes the direct free kick.
Long range shot by Gnegneri Toure Yaya goes wide right of the goal.
A cross is delivered by Mario Balotelli, clearance by Wayne Rooney.
Oliveira Anderson delivers the ball, clearance made by Gael Clichy.
Ashley Young has an effort at goal from outside the area missing to the wide right of the target.
The ball is delivered by Ashley Young, blocked by James Milner.
Micah Richards has an effort at goal from long distance that misses to the right of the target.
The ball is sent over by Luis Nani, blocked by Gael Clichy.
The ball is sent over by Sergio Aguero.
Booking The referee shows Mario Balotelli a yellow card for unsporting behaviour.
Assist by James Milner.
21:22 Goal scored
Goal! - Mario Balotelli - Man Utd 0 - 1 Man City A goal is scored by Mario Balotelli from just inside the penalty area to the bottom right corner of the goal. Man Utd 0-1 Man City.
The ball is crossed by James Milner,
Gael Clichy delivers the ball, Rio Ferdinand manages to make a clearance.
Gael Clichy produces a cross, clearance made by Rio Ferdinand.
The ball is crossed by Luis Nani, clearance by Vincent Kompany.
Free kick awarded for an unfair challenge on Rio Ferdinand by Mario Balotelli. Direct free kick taken by Rio Ferdinand.
Luis Nani sends in a cross, David Silva gets a block in.
The ball is crossed by Ashley Young.
Corner taken by James Milner.
Gnegneri Toure Yaya takes a shot. Blocked by Jonathan Evans.
A cross is delivered by James Milner, Rio Ferdinand makes a clearance.
Centre by Micah Richards, Patrice Evra manages to make a clearance.
Chris Smalling gives away a free kick for an unfair challenge on Mario Balotelli. Free kick taken by Gael Clichy.
Ashley Young takes a shot. Blocked by Joleon Lescott.
Pass corner from right by-line taken by Oliveira Anderson to short, Micah Richards makes a clearance.
The ball is crossed by Chris Smalling, Gael Clichy gets a block in.
Foul by James Milner on Ashley Young, free kick awarded. Ashley Young delivers the ball from the free kick right-footed from left wing, clearance made by Mario Balotelli.
James Milner takes a shot. David De Gea makes a save.
Pass corner from left by-line taken by Ashley Young to short.
Free kick awarded for a foul by Micah Richards on Ashley Young. Ashley Young restarts play with the free kick.
Foul by Oliveira Anderson on Sergio Aguero, free kick awarded. Gnegneri Toure Yaya takes the direct free kick.
The ball is swung over by Ashley Young, clearance by Gareth Barry.
Gareth Barry gives away a free kick for an unfair challenge on Patrice Evra. Patrice Evra takes the free kick.
The ball is delivered by Ashley Young, free kick awarded for an unfair challenge on Ashley Young by Micah Richards. The free kick is swung in right-footed by Ashley Young, Gael Clichy makes a clearance.
Luis Nani crosses the ball, clearance by Joleon Lescott.
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