Goals from Victor Moses and Diafra Sakho got the Hammers off to a flying start at the Etihad Stadium and they held on for a 2-1 win after Kevin de Bruyne pulled one back.
City dominated after the break and created a series of chances but Hammers goalkeeper Adrian was in outstanding form and refused to be beaten.
It was another notable away victory for Slaven Bilic's West Ham after securing wins at Arsenal and Liverpool already this season.
City won their first five Premier League games of the season - and a club record 11 in succession - but, coming after a Champions League loss in midweek, they made a sluggish start.
Their day started badly as playmaker David Silva was injured in the warm-up and had to be replaced by Jesus Navas.
City had an early chance when Adrian punched away a Fernandinho header from a De Bruyne corner but any hopes the hosts had of taking charge were quickly dashed as the defence was caught out.
Manuel Pellegrini had been forced to change his back four for the first time this season because of injury to captain Vincent Kompany and the reshaped rearguard afforded Moses too much space.
The on-loan Chelsea forward raced towards the area and unleashed a fierce low shot from distance to claim his first goal for the club.
City were laboured in response with their only bright sparks coming from De Bruyne, and his pass almost led to an equaliser as an Aaron Cresswell interception fell to Sergio Aguero.
Aguero seized possession and jinked around Adrian but the Argentinian screwed his shot wide.
The Hammers doubled their lead after more poor defending at a corner just after the half hour
City missed opportunities to clear as Winston Reid nodded down and Pedro Obiang tapped the ball back across goal
Sakho reacted the quickest to stab home from close range.
Sakho might have had another after racing onto a Dimitri Payet ball but Eliaquim Mangala made a vital tackle.
City showed some signs of life with Navas teeing up Aguero but Adrian saved from close range.
They replied just before the interval as Aguero laid off for De Bruyne and the £54million man drove the ball low into the bottom corner from the edge of the box.
City won a series of corners as they upped the pressure after the break and Yaya Toure had three chances to claim an equaliser in quick succession
The Ivorian was first crowded out after combining well with Raheem Sterling, then forced Adrian to save and then shot across goal.
Adrian also denied Aguero and Navas and then did well to cut out a Sterling pass across the box after more good work by De Bruyne
Toure had another effort deflected wide and Aleksandar Kolarov had a penalty appeal turned down after tangling with Sakho.
City threw forwards Wilfried Bony and Kelechi Iehanacho on during the second half and continued to press, with Otamendi testing Adrian with a header from a corner.
But it proved to no avail as the Hammers held on to blow apart City's 100 per cent record.
TWEET OF THE MATCH:
"@JKCorden: Come on West Ham! You've got this!!!!!" - Comedian and West Ham fan James Corden nervously watches on during the second half.
PLAYER RATINGS
Manchester City
Joe Hart: 6 (out of 10)
Bacary Sagna: 5
Nicolas Otamendi: 6
Eliaquim Mangala: 4
Aleksandar Kolarov: 6
Fernandinho: 6
Yaya Toure: 6
Raheem Sterling: 5
Jesus Navas: 5
Kevin de Bruyne: 8
Sergio Aguero: 6
Substitutes:
Martin Demichelis: 6
Wilfried Bony: 5
Kelechi Iheanacho: 5
West Ham:
Adrian: 8
Carl Jenkinson: 7
Winston Reid: 7
James Tomkins: 7
Aaron Cresswell: 6
Pedro Obiang: 7
Mark Noble: 7
Dimitri Payet: 8
Victor Moses: 8
Manuel Lanzini: 7
Diafra Sakho: 7
Substitutes:
Michail Antonio: 6
Nikica Jelavic: 5
James Collins: 5
STAR MAN:
Kevin de Bruyne: City may have lost, but the Belgian was by the best player on the pitch
The £54million signing showed no sign of nerves on his full debut, causing West Ham problems with his vision and trickery on the edge of the box
He took his goal superbly well, too.
MOMENT OF THE MATCH:
Diafra Sakho's goal: The Etihad Stadium was stunned into silence as West Ham opened up a two-goal advantage on the hosts
Victor Moses' goal was a better strike, but City's failure to clear a routine corner exposed just how disorganised they were without Vincent Kompany
West Ham players were lining up in the box to tap it in
In the end Sakho did the honours.
VIEW FROM THE BENCH:
Slaven Bilic had already beaten Arsenal and Liverpool on the road by playing a counter-attacking style so it came as no surprise that he did the same at the Etihad Stadium
The Croatian's decision to play five across the midfield paid off
Yaya Toure's influence was negated while Dimitri Payet and Manuel Lanzini defended well and had the energy to break as soon as the visitors had the ball
Manuel Pellegrini's options were hindered by an injury to David Silva in the warm-up
Jesus Navas came into the team and played poorly, but with Samir Nasri injured, Pellegrini had no other option.
MOAN OF THE MATCH:
West Ham's time-wasting: Right from the moment the first goal went in, the Hammers tried to force the referee to stop the match on numerous occasions
It is part of the game, but West Ham pushed it to the extreme, which annoyed City and their fans.
WHO'S UP NEXT
Sunderland v Man City (Capital One Cup, Tuesday September 22)
Leicester v West Ham (Capital One Cup, Tuesday September 22)
Source : PA
Source: PA