Sergio Aguero scored twice as Manchester City outran, outmuscled and outclassed Manchester United in a 4-1 victory at the Etihad stadium on Sunday that exposed the Premier League champions' weaknesses in all departments.
Aguero volleyed City ahead after 16 minutes and made it 3-0 in the opening minute of the second half after Yaya Toure had put the home side in command on the stroke of halftime.
United's defence was sliced wide open again when Samir Nasri volleyed home after 50 minutes and manager David Moyes's first Manchester derby descended into the realm of nightmares.
Wayne Rooney's curling free kick was the only ray of sunshine for United, who have now lost four of the last five league derbies with City who climbed to third in the table with 10 points, two behind leaders Arsenal and Tottenham Hotspur.
"It was a very important result, normally you don't expect to win 4-1 against Manchester United," Pellegrini told a news conference. "But (the) most important (thing) after that is the way we played.
"Winning the way we won today gives a lot of confidence of course."
Moyes, who could well deploy the kind of 'hairdryer' treatment predecessor Alex Ferguson aimed at his players after such poor performances, made no excuses for a woeful showing.
"We were second to things in the first half especially, we seemed to be a yard behind it," he told a news conference. "We just never really got to the pitch of the game right from the off which was disappointing because we had set out to do that.
"We had a good result midweek (a 4-2 win over Bayer Leverkusen) to build on to come into this game but we never really quite got to grips with it."
The big screen at the Etihad had showed a re-run of the goals from City's 6-1 thrashing of United at Old Trafford two seasons ago, when the team from the blue side of the city went on to win the title, and those visions seemed to set the tone.
United had already started the day badly when striker Robin van Persie was ruled out with a groin strain and it got worse as last season's runners-up trampled all over them from the start.
City barely missed David Silva, who had not recovered from a thigh injury, with the nippy Jesus Navas, Samir Nasri and Sergio Aguero posing United problems with every push forward.
The hosts' dominance was soon rewarded. Nasri shook off Chris Smalling down the left and his flick found Aleksandar Kolarov whose accurate cross was deftly volleyed home by Aguero to send home fans wild on a warm afternoon in Manchester.
City continued to dominate with centre back Vincent Kompany easily keeping increasingly frustrated United striker Rooney at bay, Toure winning the physical battle of the midfield and their attackers playing with a hunger the visitors just did not have.
Rooney, who had come into the game in good form having scored three goals in his previous two matches, lacked decent service from a mediocre midfield with wingers Antonio Valencia and Ashley Young falling short on pace and imagination.
City, whose manager Manuel Pellegrini was like Moyes in his first Manchester derby, were in danger of going into the break with only a slim advantage to show for their supremacy but Nasri's stoppage-time corner provided just rewards.
The Frenchman swung the ball in, finding Negredo whose header was helped into the net by Toure's leg for the Ivorian's third league goal of the season.
Having sealed the title in 2012 on goal difference from United, City know only too well how important the winning margin can be and they turned the screw immediately after the restart.
Kolarov fed Negredo whose cross to the back post was all to easily tapped in by Aguero as the United defence's sluggishness and carelessness was once again exposed.
As Moyes's men threw themselves forward in a bid to get back into the game, they created yet more space for their hosts who scented a big scoreline would be on the cards.
Their fourth came on 50 minutes when Navas again evaded anything approaching a United challenge and was given a host of options as Kompany, Negredo and Nasri lurked with the Spaniard plumping for the Frenchman who side-footed home.
Nasri celebrated with a few punches in the direction of the corner flag but it was United who really felt the blows.
They did, however manage to stem the flow of goals, and chances fell to Rooney, Marouane Fellaini and Patrice Evra, who hit the post, before their 86th-minute consolation goal.
Rooney, who worked hard and at times had seemed like United's only midfielder or striker, aimed a superb free kick into the top right corner and although Joe Hart got a hand to it he could not keep it out.
It prevented a fourth clean sheet of the league season for City but that was about the only positive for the champions whose manager says they have had the hardest start to the fixtures list of any of the top teams.
United, who are in eighth place with seven points, have faced Chelsea, bitter rivals Liverpool and City in their opening five games, picking up just one point from those three tricky matches and can have few arguments that they deserved any more.