Goals from James Ward-Prowse and Che Adams ensured Carlo Ancelotti’s side became the final club to lose a game this season.
Everton remain top of the standings with 13 points and a healthier goal difference than city rivals and reigning champions Liverpool.
But Southampton moved up to fifth with their third win in four matches.
“We knew it was a good challenge for us. They came here unbeaten and we didn’t like that feeling. Our confidence was high,” Ward-Prowse said afterwards.
“We were aggressive, we believe in what we are doing and we have the quality to go and score goals… This gives us a lot of confidence, we weren’t really troubled.”
Southampton took the lead in the 27th minute when Ward-Prowse played a neat one-two with Danny Ings.
The latter provided the through ball for his fellow Englishman to fire a shot past Jordan Pickford.
Ings turned provider again eight minutes later when he crossed from the left flank to find Adams at the far post.
The unmarked striker took his time to pick his spot to beat Pickford with a strike that deflected…