Albion defender McAuley struck eight minutes from time to earn Albion their first ever Premier League win over the Blues, whom they had not beaten at any level since 1979.
It leaves Chelsea three points adrift of Arsenal, winners at Liverpool earlier in the day, in the battle for a Champions League spot.
They were matched for long periods by Roy Hodgson's side who looked full of confidence after back-to-back wins before McAuley's crucial intervention.
Petr Cech was called into action more often than Albion counterpart Ben Foster as the home side looked full of creativity.
Marc-Antoine Fortune again impressed in the lone striker's role while Youssouf Mulumbu and James Morrison shone in midfield.
Chelsea had looked sharp in the opening 45 minutes but were poor after the interval and were made to pay for poor finishing by Daniel Sturridge.
Peter Odemwingie, presented with the Premier League player of the month award for February before the game, had a glancing header blocked from a James Morrison free-kick.
Then Chelsea keeper Cech then had to be alert to finger-tip a fierce Morrison drive over the bar.
Chelsea threatened for the first time when Sturridge seized onto a casual pass from Jonas Olsson and squared the ball across the Albion box.
But Juan Mata failed to make proper contact on his attempted volley.
Mata did hit the target from a narrow angle after some neat one-touch football. But Foster was alert to the situation and blocked his shot at the expense of a corner.
Ridgewell came to Albion's rescue when he blocked a goalbound attempt from Gary Cahill after a corner from Frank Lampard had dropped invitingly into his path 15 yards out.
Foster showed his class seven minutes before the interval when he leapt acrobatically to turn aside a fierce Michael Essien effort.
The former England keeper reacted quickly to snatch the loose ball before Didier Drogba could take advantage.
Sturridge should have broken the deadlock after 40 minutes after a superb pass from Drogba created the opening.
But the striker screwed his attempt wide of the right hand post after having time to line up his shot.
Albion ended the first half with a flourish as Cahill deflected a Mulumbu shot just past the far post.
Sturridge missed another great chance to put the Blues in front after 55 minutes.
He ran onto a pass from Mata but then lacked the belief and confidence to take the ball around Foster who had raced out of his area.
Albion were forced into a change after 55 minutes when Steven Reid limped out of the action to be replaced by Gabriel Tamas.
The home side came back into the game and David Luiz did well to dispossess Odemwingie after he had taken a pass from Fortune in his stride.
Cech then beat out a fierce rising shot from Fortune.
Ridgewell became the first player to be yellow carded after 65 minutes for a challenge on Ramires.
Albion enjoyed a purple patch and came close on three occasions to scoring in the space of five minutes.
Cech turned over a fierce drive from the impressive Mulumbu and also reacted sharply to block a low shot on the turn from Fortune.
Then it needed a last ditch challenge from Ashley Cole to deny Chris Brunt as he closed in on a Ridgewell centre.
Fernando Torres replaced Essien after 76 minutes and within three minutes Keith Andrews had been booked for chopping down the striker.
But after 82 minutes McAuley put Albion ahead.
Ridgewell drove Andrews' chip across the area and McAuley diverted the ball past Cech
Cole was booked for fouling Albion substitute Shane Long who had replaced Fortune.