Match ends, Everton 4, Manchester City 0.
Everton produced a brilliant performance to stun Manchester City, whose Premier League title hopes are now over according to manager Pep Guardiola.
The Toffees willingly soaked up 71% of City possession but restricted Guardiola's side to few chances and scored with four of just six attempts at goal.
Romelu Lukaku coolly side-footed in a Kevin Mirallas cut-back and the Belgium internationals combined again after the break, Mirallas drilling Lukaku's through-ball across the keeper.
Tom Davies sent Goodison Park into raptures on just his second league start by dinking a third over Claudio Bravo and £11m debutant Ademola Lookman fired between the legs of the keeper in injury time.
Goals from the two teenagers left Everton boss Ronald Koeman visibly elated, while Guardiola cut a frustrated figure, remonstrating with the fourth official late on in what is his heaviest ever league defeat as a manager.
City lacked cutting edge throughout, though had Davies not headed a looping Bacary Sagna header off the line before half-time, they may not have gone on to suffer a fifth league defeat of the season.
They stay fifth, 10 points off leaders Chelsea, while Everton remain seventh.
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- Relive Everton's brilliant victory
Brilliant Everton - Koeman gets it right
What a difference a week makes. After FA Cup defeat to Leicester last weekend an angry Koeman demanded the club's hierarchy "opened its eyes".
The £24m signing of Morgan Schneiderlin lifted some gloom but the roars for his 65th-minute appearance from the bench were dwarfed by the noise in injury time when Lookman, newly arrived from Charlton, made his mark.
Koeman was bold in starting with Davies and 20-year-old defender Mason Holgate, but pragmatic in his game plan. City have had over 50% of the ball in every league outing this season but Everton sat and soaked up possession comfortably.
Leighton Baines slid in to deny Raheem Sterling an opening early on and, Davies' header off the line apart, the home goal never looked under serious threat.
The Toffees ran further and produced more sprints than the visitors, while with the ball they were direct, springing attacks through Lukaku, who proved a handful for City's ragged back four.
Davies ran further than anyone on the pitch and released Mirallas in the build-up to the opening goal, before being involved in the second and cleverly chipping in the third after a driving run from his own half.
Schneiderlin could threaten the 18-year-old's place but Koeman will welcome such a selection dilemma.
The Dutchman knows his team are far from a finished article but this win showed all they could be.
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Soft-centred City pose questions for Pep
"It looks like the title challenge is beyond City," BBC Radio 5 live pundit Kevin Kilbane said at the end of match where the visitors' soft centre was all too apparent and clinically exploited.
After 10 games of the season Guardiola's side topped the table on 23 points, but 11 matches later he now says they are too far adrift.
The warning signs were there in those opening 10 games, where City kept two only clean sheets.
Their defensive predicament has continued and at Goodison Everton's direct balls repeatedly took the City midfield out of the game, exposing a back four which seemed to have little understanding as a unit.
Vincent Kompany's persistent injuries have created a hole in the heart of defence that John Stones and Nicolas Otamendi have been unable to fill with authority, while in central midfield, Pablo Zabaleta's performance was robust but his quality on the ball is no substitute for the silky Ilkay Gundogan.
Zabaleta had played 30 passes by the time he went off on the hour, 40 fewer than Yaya Toure.
Individual mistakes also proved costly. Toure took a heavy touch for Everton's killer second goal, while Gael Clichy sloppily lost possession for the first.
City have now conceded more goals than any other in the top seven, while goalkeeper Bravo has been beaten by 14 of the last 22 shots on target.
Guardiola has answers to find.
Man of the match - Tom Davies (Everton)
'Perfect Everton' - What the managers said
Everton boss Ronald Koeman: "We scored at the right time in the first half and then to score straight after half-time made it very difficult for them.
"I think it is a big compliment to Everton today - the organisation defensively. It makes the final result and the way we played perfect.
Manchester City manager Pep Guardiola: "In so many games we create enough chances to but when they arrive they score and the second time they arrive they score.
"That for the mind of the players is tough, mentally tough and that is why we have to keep going be strong and work harder."
Lookman follows Eto'o at Everton - the key stats
- This was Everton's biggest ever Premier League win over Man City.
- Everton scored with all four of their shots on target.
- In four of their last seven Premier League games, Manchester City have conceded with the first shot they've faced.
- Romelu Lukaku has been involved in eight goals in his last nine home Premier League games (five goals, three assists).
- The first shot of the game came in the 25th minute, the second-longest wait for the opening shot of a Premier League game this season after Watford versus Middlesbrough on January 14th (26th minute).
- Tom Davies and Ademola Lookman became the 16th and 17th different teenagers to score a Premier League goal for Everton; the joint-most in the competition with Arsenal.
- Lookman was the first Toffees player to score on their Premier League debut since Samuel Eto'o in August 2014 against Chelsea.
Manchester City host second-placed Tottenham in a 17:30 GMT kick-off on Saturday, shortly after Everton seek just a second away win in eight matches when they play at Crystal Palace at 15:00 GMT.
- 30HolgateBooked at 55mins
- 25Funes Mori
- 18BarrySubstituted forMcCarthyat 74'minutes
- 8BarkleySubstituted forLookmanat 90'minutes
- 11MirallasSubstituted forSchneiderlinat 65'minutes
- 10LukakuBooked at 90mins
- 19E Valencia
- 30OtamendiBooked at 90mins
- 42Y Touré
- 5ZabaletaSubstituted forIheanachoat 62'minutes
- 17De Bruyne
- 21SilvaBooked at 75mins
- Mark Clattenburg
- Shots on Target
Second Half ends, Everton 4, Manchester City 0.
Goal! Everton 4, Manchester City 0. Ademola Lookman (Everton) right footed shot from a difficult angle on the right to the centre of the goal. Assisted by Seamus Coleman.
Nicolás Otamendi (Manchester City) is shown the yellow card.
Romelu Lukaku (Everton) is shown the yellow card.
Foul by Nicolás Otamendi (Manchester City).
Romelu Lukaku (Everton) wins a free kick in the defensive half.
Attempt blocked. Sergio Agüero (Manchester City) right footed shot from outside the box is blocked. Assisted by David Silva.
Nicolás Otamendi (Manchester City) wins a free kick on the right wing.
Foul by Romelu Lukaku (Everton).
Substitution, Everton. Ademola Lookman replaces Ross Barkley.
Bacary Sagna (Manchester City) wins a free kick in the defensive half.
Foul by Ross Barkley (Everton).
Attempt blocked. Romelu Lukaku (Everton) right footed shot from outside the box is blocked. Assisted by Ross Barkley.
Offside, Everton. Ashley Williams tries a through ball, but Romelu Lukaku is caught offside.
Offside, Manchester City. Kevin De Bruyne tries a through ball, but Kelechi Iheanacho is caught offside.
Corner, Everton. Conceded by Gaël Clichy.
Attempt missed. Romelu Lukaku (Everton) left footed shot from a difficult angle on the left misses to the right. Assisted by Ross Barkley.
Foul by Raheem Sterling (Manchester City).
Tom Davies (Everton) wins a free kick in the defensive half.