Goals by Danny Murphy, Bobby Zamora and Damien Duff condemned United to their second league defeat in eight days.
Another surprising day in England's top flight began with Liverpool's 2-0 reverse at bottom club Portsmouth, their seventh league defeat this season.
Third-placed Aston Villa moved within two points of United with a 1-0 home victory over Stoke City and Tottenham Hotspur won 2-0 at Blackburn Rovers to return to the top four.
Manchester City edged a seven-goal thriller against Sunderland at Eastlands, winning 4-3 to claim only their second victory in 11 league matches although media speculation about the future of manager Mark Hughes rumbled on.
United, fielding a makeshift defence because of a string of injuries, went behind after 22 minutes when midfielder Murphy seized possession from Paul Scholes and fired past goalkeeper Tomasz Kuszczak from long range.
In the 46th minute in-form striker Zamora met a Clint Dempsey knockdown to half volley past Kuszczak and notch his 10th goal of the season.
DUFF VOLLEY
United manager Alex Ferguson threw on attacking substitutes Dimitar Berbatov and Danny Welbeck but a superb Duff volley with 15 minutes remaining sealed an emphatic victory for the hosts.
"We were playing a United side suffering very badly from injuries but we can't do much more I suppose than play as well as we can play and get the best result we can get," Fulham manager Roy Hodgson told Sky Sports.
Hodgson gave special praise to striker Zamora who has bagged five goals in four games.
"He is playing very, very well. He is a handful for any defence. I think he would have been a handful if they had (first-choice central defenders) Rio Ferdinand and Nemanja Vidic playing," he said. City boss Hughes watched his side climb to sixth after Sunderland had Michael Turner sent off in stoppage time.
Craig Bellamy set up Roque Santa Cruz for his first league goal for City before Carlos Tevez converted a penalty to make it 2-0 after 12 minutes.
Sunderland hit back to level through defender John Mensah and a rocket shot from Jordan Henderson, only for Bellamy to curl home City's third on 35 minutes.
Kenwyne Jones then headed Sunderland level again before Santa Cruz grabbed his second with 21 minutes to go.
Earlier, Liverpool lost at Portsmouth after excellent strikes from Nadir Belhadj and Frederic Piquionne.
A header from Norwegian frontman John Carew sealed Villa's win over Stoke while Peter Crouch's double helped Tottenham sink Blackburn.
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