At the other end of the table, Joe Cole struck in stoppage-time to earn Liverpool a much-needed 2-1 victory over Bolton Wanderers.
United were well below their best but triumphed 2-1 at West Bromwich Albion with goals by Wayne Rooney and Javier Hernandez after the hosts missed a penalty.
Carlos Tevez also missed a spot kick but City got away with it as Adam Johnson's 34th-minute goal was enough to clinch a 1-0 home win over Blackpool.
United have 41 points from 19 games with City also on 41 from 21 matches. Arsenal are third with 39 points from 20.
Arsenal will be delighted to have succeeded where United, Chelsea and Tottenham Hotspur failed this season by winning at St Andrews.
They took the lead after 13 minutes when Robin van Persie's free-kick took a deflection and doubled it after 58 when Samir Nasri expertly finished off a quickfire move with his 13th goal of the season.
Birmingham, perhaps tired from the fightback which earned a 1-1 draw against United in midweek, struggled to keep up and when Nasri and Cesc Fabregas caused mayhem in the home defence after 66 minutes a Roger Johnson own goal completed the victory.
With Chelsea in action against Aston Villa on Sunday, Tottenham moved back to fourth on 36 points after Gareth Bale's early header secured a 1-0 victory over Fulham.
Sunderland, who suffered their first home defeat of the season against Blackpool in midweek, recovered with a 3-0 home win over Blackburn Rovers to rise to the heady heights of sixth.
West Ham United beat Wolverhampton Wanderers 2-0 to climb off the bottom and out of the relegation zone after two wins and two draws from their last four games. Stoke City also overcame Everton 2-0.
Manchester United were off the pace throughout their early match at the Hawthorns but somehow came away with all three points.
They went ahead after three minutes with a Rooney header, his first club goal in open play since March, but West Brom equalised when James Morrison stroked in a superb shot from the edge of the box after 14.
ODEMWINGIE MISS
West Brom, who had a good penalty claim turned down in the first half, were awarded one after 63 minutes but Peter Odemwingie sent his effort horribly wide and they paid the price when Hernandez came off the bench to head in a Rooney corner after 75.
"It is a massive result for us today, a lot of games you have to battle and we had to do that today," United manager Sir Alex Ferguson told Sky Sports.
"Our two centre-halves were magnificent and I thought Wayne Rooney was outstanding, he was unbelievable, he drove us on."
Tevez will rarely have had so many chances without scoring as he was on the end of most of City's attacking moves.
After a couple of early near misses the visitors went
