Cristiano Ronaldo, right, celebrates his excellent opener at Old Trafford
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Cristiano Ronaldo's penalty two minutes from time earned Manchester United a narrow win that saw them close the gap on league leaders Arsenal to a point.
It was a cruel finish for Everton, who had battled well before Steven Pienaar felled Ryan Giggs late on, allowing Ronaldo to convert from the spot.
The Portuguese had earlier fired the hosts into the lead with a 20-yarder.
Tim Cahill levelled with a firm header and the Toffees looked to have earned a hard-fought point until Ronaldo's goal.
The result ended the Toffees' 13-match unbeaten run in all competitions.
And it could prove a vital three points for United, who move a single point behind Arsenal again after the Gunners' derby win over Tottenham on Saturday.
The opening of the match, between two of the form sides in the Premier League, was predictably fraught, with four bookings in the opening 15 minutes and a host of fouls interrupting the flow of the game.
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606: DEBATE
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However, it was United who settled first, despite the absence of key trio Edwin van der Sar, Rio Ferdinand and Owen Hargreaves through injury.
Carlos Tevez had the game's first real chance when Wayne Rooney helped on a Ronaldo cross only for the Argentine's shot to be deflected wide.
With 22 minutes on the clock, though, the match was crying out for a piece of individual brilliance - and Ronaldo duly obliged.
The winger collected Tevez's cross-field pass first time, stepped inside Lee Carsley and drilled into the top corner left-footed, with keeper Tim Howard motionless.
But instead of sparking an expected United onslaught, it was Everton that struck next just five minutes later, Cahill rising brilliantly to head home Pienaar's deep cross.
Suddenly the match was full of quality and endeavour, and Rooney came agonisingly close to restoring the hosts' lead when his excellent improvised lob cleared Howard, only for Joleon Lescott to head off the line.
Cahill's header was his seventh goal in all competitions this season
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And the move of the match came just before half-time, with Giggs and Ronaldo exchanging passes on the edge of the box before the latter latched onto Giggs' clipped cross, firing a flamboyant scissors kick narrowly over the bar.
Everton were not without their own moments in the opposition half, not least when a Lescott break down the left had home keeper Tomasz Kuszczak sprawling, but it was largely a defensive effort again at the start of the second half.
Minutes after Howard was forced to parry an Anderson drive, Rooney fed Tevez in the box and his deflected shot again brought the best out of the American keeper.
But the visitors, who had not conceded a goal for five and a half hours of football before Ronaldo's first-half strike, refused to buckle.
United became increasingly frustrated in their approach play, prompting Sir Alex Ferguson to replace Michael Carrick with Louis Saha.
It had little impact, a firm Rooney drive that dipped onto the roof of the net one of very few decent efforts on goal.
However, with the match approaching the closing stages, Pienaar inexplicably swung his back leg around to fell Giggs as the Welsh winger drove into the box.
Referee Howard Webb awarded the spot-kick and Ronaldo made no mistake to keep United well in the title hunt.
Manchester United assistant boss Carlos Queiroz:
"This was a difficult game for us - possibly a bit too tactical at times - and Everton closed us down well and fought for everything.
"But, especially in the second half, our performance was full of desire and determination and there was only one team trying to win.
"It was a special win because it came so late. This is a period when a lot of games come close together and we don't expect it to be easy, so it's good to be up near the top of the table."
Everton manager David Moyes:
"We're really disappointed at the decision Steven Pienaar's made - he's been outstanding of late and was very good again today, but it really was a moment of madness.
"But we played well today. You're never going to come here and have it all your own way or dominate possession, but we defended well when we had to and shut them out.
"I won't let the players be too down. This has been a good season for us so far, we're pushing forwards and people are realising we should be taken seriously, so we have a lot to be positive about."
Man Utd: Kuszczak, Simpson (O'Shea 46), Brown, Vidic, Evra, Ronaldo, Carrick (Saha 71), Anderson (Fletcher 86), Giggs, Rooney, Tevez.
Subs Not Used: Heaton, Nani.
Booked: Rooney, Evra, Anderson.
Goals: Ronaldo 22, 88 pen.
Everton: Howard, Hibbert, Yobo, Jagielka, Lescott, Carsley, Cahill (Anichebe 85), Neville, Pienaar, Yakubu (Gravesen 76), Johnson.
Subs Not Used: Wessels, McFadden, Nuno Valente.
Booked: Cahill, Hibbert, Pienaar.
Goals: Cahill 27.
Att: 75,749
Ref: Howard Webb (S Yorkshire).
BBC Sport Player Rater man of the match: Man Utd's Ronaldo 8.05 (on 90 minutes).
Please note that you can still give the players marks out of 10 on BBC Sport's Player Rater after the match has finished.
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