In the second minute, Sergio Aguero earned a fantastic assist as he found Mario Balotelli, who evaded Branislav Ivanovic and Petr Cech, to put the Citizens on the board.
The Blues would answer back in the 34th minute with a goal from Raul Meireles, off the a fine cross from Daniel Sturridge.
The match turned in the 58th minute when left back Gael Clichy received his second yellow card. Playing a man down, City shifted to a more defensive posture.
Chelsea would go ahead in the 73rd minute, when midfielder Frank Lampard converted a penalty kick following City defender Joleon Lescott's hand ball in the box.
Manchester City took seven shots with two on goal, while Chelsea took 16 shots with four on goal. Possession was evenly split.
it was the first Manchester City loss since a 2-1 defeat at Everton on May 7.
Here are the highlights from the Chelsea - Manchester City match: