The midfielder, who has been out injured for much of Palace's troubled campaign so far, showed why he is so important to the Eagles as he took his tally for the season to four.
City contributed to their own downfall, however, after goalkeeper Keiren Westwood handled a backpass to present Ambrose with his first-half opener.
Ambrose tucked away the second from the penalty spot in the second half after Richard Wood fouled James Vaughan to secure back-to-back wins for the south Londoners.
Coventry have now lost three games on the trot but they made the livelier start at Selhurst Park.
Marlon King, still to open his goalscoring account since returning to football with the Sky Blues in September, had the game's first chance when he superbly controlled a high ball in the area and forced a fine save from Julian Speroni.
Palace's Argentinian goalkeeper also kept out a Gary McSheffrey header before Lukas Jutkiewicz toe-poked McSheffrey's cross inches wide.
The hosts' first opportunity fell to Ambrose after 20 minutes but he sliced his volley wide.
King should have broken his duck moments later when he was played in by Carl Baker, but the former Wigan striker skied his effort.
Ambrose made no mistake however when he was gifted the chance to open the scoring in the 33rd minute. McSheffrey sent a horrible backpass towards Westwood who had little option but to catch the ball, conceding a free-kick on the edge of the six-yard box.
With every Coventry player back on the goal-line, Vaughan shaped to shoot but instead rolled the ball to Ambrose who thumped it into the net.
City thought they had equalised five minutes after the break but were denied by a breathtaking save from Speroni.
Baker chipped the ball into the area and gave Lee Carsley a free header but Speroni, Palace's player of the year for the past three seasons, underlined why he is so highly rated by diving to his left and tipping the ball clear.
Two minutes later Palace doubled their advantage after Vaughan was tripped by Wood.
The Coventry players argued that the foul had occurred outside the area but referee Pat Miller pointed to the spot and Ambrose sent Westwood the wrong way.
Palace defender Nathaniel Clyne almost added a third after a superb solo run but his shot flashed wide.
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