Fine finishes from Filippa Angeldahl and Lauren Hemp in the first half earned a well-deserved 2-0 victory for City as defending champions Chelsea offered little in front of goal.
Emma Hayes’ side, who claimed a big Champions League victory over Lyon in midweek, now sit in third place, a point behind the two Manchester clubs, but they do have a game in hand on both.
A poor clearance from Chelsea goalkeeper Ann-Katrin Berger paved the way for the opener in the 21st minute as Hemp found Angeldahl, who made the most of the space afforded to her by picking out the top corner for her first WSL goal.
Nine minutes later it was two, Hemp this time applying the finishing touch with a volley lashed into the corner with the outside of her left foot after Chelsea failed to clear a cross.
Chelsea tried to apply pressure after the break but were unable to create a real chance until stoppage time, when Melanie Leupolz volleyed over, and their miserable day was compounded by an injury to Erin Cuthbert, who limped off the pitch in tears.