Chris Wood, on loan from West Brom, kept his cool to score from the penalty spot early in the second half after Forest goalkeeper Lee Camp had a rush of blood and upended birthday boy Jon Stead eight yards out.
It was not the first time this season that Wood had been the scourge of Forest.
The 20-year-old striker netted twice at the City Ground in October during a loan spell at Birmingham to help the Blues to a 3-1 victory.
His goal this time round edged the Robins up to 40 points, within three of their opponents.
Forest were unchanged after an impressive 3-0 victory at Crystal Palace last weekend.
Wood's inclusion was one of three changes made by City boss Derek McInnes. Full-back Jamie McAllister and midfielder Martyn Woolford were also recalled.
The first half was bereft of real goalscoring chances until the 38th minute when visiting goalkeeper Dean Gerken pushed Andy Reid's shot from the left side of the area past his near post.
Steve Cotterill's side had dominated without really carving City open and it was against the run of play when the goal came.
Camp made a mess of a Richard Foster cross, pushing the ball back into the area from under his own crossbar. Then after Stead had controlled the loose ball, Camp rushed out and upended the striker.
He was booked for the foul before getting a strong left hand to Wood's spot-kick, however, the Northern Ireland international could only push the ball into the side of his net.
From there on in it was much of the same - intense Forest pressure. Cotterill's team were creating chances in the second half though, but found City keeper Gerken in inspired form.
Gerken athletically tipped Dexter Blackstock's header over the bar on the hour mark.
He pushed away a header from Marcus Tudgay in the 88th minute before Reid curled an effort agonisingly wide from the edge of the box immediately afterwards.
Gerken then dived to hold another header from Forest captain Luke Chambers in injury time, with several Forest players circling looking to pounce on a rebound.
City held on for their first league win over Forest since 1947 and their first victory at the City Ground since 1955.
