A spot kick from Danny Murphy and a late Zoltan Gera strike gave the Cottagers the spoils, while Paul Scholes and Wayne Rooney both saw red.
Fulham had approached the game with real intent from the first whistle and United were struggling to deal with their opponents even before Scholes' handball on the line gifted the home side a penalty.
United did recover their composure and set about applying intense pressure in the second period, but the home side held strong for Gera to ensure the win in the 87th minute before Rooney was dismissed for a second yellow.
The loss will come as a significant blow to United in the wake of their defeat to Liverpool last weekend, and with the Merseysiders able to move to within a point of top spot on Sunday, the Old Trafford faithful will be concerned that the title race is now well and truly back on.
Cottagers come out of the trapsFulham served notice of their intentions when Clint Dempsey fired just wide with an angled drive in the second minute.
Moments later though, United almost stole the lead when Dimitar Berbatov headed just over from a cross by Patrice Evra.
United were struggling to impose themselves on Fulham who had taken the game to the Red Devils in a confident fashion.
Zamora was allowed to run on freely after collecting the ball midway in the United half.
Unfortunately for the Fulham striker he could not take advantage of his freedom and sent a 20-yard drive beyond Edwin Van der Sar's right-hand post.
It was all Fulham with United looking decidedly uncertain at the back and the home side's pressure paid off in dramatic fashion in the 17th minute when Scholes was sent off for handball.
BreakthroughThe corner from Simon Davies was headed goalwards by Brede Hangeland and after Zamora's first flick-on was saved by Van der Sar, his second attempt was kept out by the hands of Scholes.
Captain Murphy stepped up to send Van der Sar the wrong way from the spot and give Fulham the lead.
United had clearly struggled to compete in the opening exchanges and the goal was just reward for Fulham's bullish opening.
The Cottagers were humbled 4-0 in the FA Cup at Craven Cottage by United earlier in the month but Sir Alex Ferguson's side now faced a struggle to get back into the game after being reduced to 10 men.
Fulham continued to dominate and only a brilliant save from Van der Sar prevented Zamora from making it 2-0 in the 21st minute.
Fulham wasted two more chances to go further ahead with Van der Sar saving brilliantly from Zamora again in the 27th minute and then two minutes later Dempsey sent a right-foot drive flashing wide from 20 yards.
In the 32nd minute a cross from Dempsey was met by the head of Dickson Etuhu but the Fulham midfielder's header was collected safely by Van der Sar.
Moments later the Dutchman had to be alert once more as he dived to his right to catch a ferocious long-range drive from Zamora.
Second-half fightbackFulham were given a standing ovation at the half-time whistle, but it would be United that would come out from the break with renewed intent.
Ferguson decided Rooney would provide more firepower in attack as he replaced the ineffective Berbatov for the second half.
In the 52nd minute a cross from Darren Fletcher saw Cristiano Ronaldo climb high to send a header just over the Fulham crossbar.
United were beginning to get back into the game and Fletcher brought a save from Mark Schwarzer in the 59th minute when he let loose with a low drive from 20 yards.
And Fulham had Schwarzer to thank again in the 61st minute when he saved superbly to keep out a powerful header from Ronaldo.
But the best was yet to come when, in the 64th minute, the Australian produced an incredible double save at point-blank range to deny Park Ji-Sung and Rooney and then dived full length to keep out a Ronaldo drive.
Fulham were reeling for the first time in the game and Murphy was forced off through injury to be replaced by Olivier Dacourt in the 67th minute.
The next fifteen minutes came and went and the storm had been more or less ridden by the Cottagers, leaving just enough time for Zoltan Gera to put the icing on the cake.
Substitute Gera struck their second from Johnson's assist with an acrobatic effort, and Rooney earned a second bookable offence by throwing the ball away as the frustration of defeat proved too much to bear.
1st Half Goals
Shots on Target
Shots off Target