The Nerazzurri, who played with 10 men for the majority of the second half after Yuto Nagatomo's red card, have now won three matches in succession against the Rossoneri.
The defeat pushes Andrea Stramaccioni's men into joint-third position in the Serie A table, while Massimiliano Allegri's misery is compiled, entering the international break in the bottom half of the table.
Here are six things we learned from the Derby della Madonnina.
Massimiliano Allegri seemed to have banished any rumours that his job was at risk with an impressive win against Zenit in the Champions League on Tuesday, but defeat in the derby has cast new doubt on the future of the former Cagliari manager.
With an international break upon us, there is the opportunity for the Milan board to evaluate the situation properly and potentially pull the trigger on the Rossoneri manager.
Potential candidates have yet to emerge in the aftermath of this defeat, but it is inevitable that rumours will swirl in the Italian media tomorrow.
Bojan Krkic was handed a third successive start for the Rossoneri in a surprising move by Massimiliano Allegri, who dumped Giampaolo Pazzini to the bench once more.
The former Barcelona starlet has flopped since moving to Serie A, with a disappointing spell with Roma last season being the first warning sign.
Milan decided to take the plunge, snapping up the 22-year-old for the season in the hope that some of the outrageous potential that we saw with the Blaugrana could be fulfilled with the Diavoli.
To be handed a start in the derby was a huge show of faith from Allegri, but Bojan sadly failed to return the favour, fluffing his lines when several golden opportunities presented themselves to him.
Goalless in six matches so far, the signs are not good, but given that Pazzini appears to be equally useless and Milan's Brazilian duo, Robinho and Alexandre Pato, have patchy injury records, there will be plenty more opportunities for the youngster.
Nigel De Jong and Riccardo Montolivo were the silver lining to the cloud that was another blunt performance by Milan's attack.
The midfielders operated together to form a "doble cinco," the platform for Milan's attacking quartet to supposedly shine.
The Dutch and Italian internationals performed their duties admirably, breaking up play quickly and dispatching the ball intelligently to Milan's attacking talent, who constantly wasted the ball in the final third.
It is a partnership that could provide a revival for the Rossoneri, with De Jong's destructiveness and Montolivo's creativeness combining to provide two fundamentals to any successful midfield: ball-winning and constructive possession.
Stephan El Shaarawy has enjoyed a magnificent spell of form which has dragged the Rossoneri up the table somewhat and avoided a precarious situation in the Champions League.
The Azzurrini international is still young, though, and cannot be expected to lift the side as regularly as Zlatan Ibrahimovic once did. Massimiliano Allegri must realise that a more collective effort will be necessary to change Milan's fortunes moving forward.
El Shaarawy cut a disappointing figure as he was substituted, despite a dismal performance from Bojan Krkic, making way for Giampaolo Pazzini and holding his head in his hands, isolated from the rest of Milan's bench.
A great future awaits the 19-year-old, but expectations were surely quashed somewhat after the derby.
Cristian Abbiati is one of the few positives to come from a shocking start to the season for the Rossoneri.
The 35-year-old has justified the faith shown in him by Massimiliano Allegri throughout his tenure by producing a string of saves at crucial moments in matches.
Abbiati is similar to the Dallas Cowboys' Tony Romo, though, in the way that he possesses exceptional ability and can produce moments of brilliance to help his team, but it is inevitable that he will make a mistake at some point.
Abbiati made the incredible mistake of passing straight to Diego Milito while the Nerazzurri led 1-0, but the Argentine could not capitalise, spurning a golden opportunity to put the Rossoneri 2-0 down in the opening few minutes.
Abbiati, who was captain for the evening in the absence of Massimo Ambrosini, will not have to worry about his place in the side, but his concentration must improve if he is ever to be considered one of Italy's elite goalkeepers.
Andrea Stramaccioni still has much to do, but there are signs that the former Primavera coach is blossoming into a top-class manager, capable of returning the Nerazzurri to the Champions League and perhaps a scudetto in the future.
The 3-5-2 formation that Inter have utilised in recent weeks is finally beginning to look like it can initiate the Nerazzurri's return to prominence.
The players have not fully adapted to the formation yet, as several Nerazzurri performances demonstrated. Philippe Coutinho was anonymous, Yuto Nagatomo was ineffective in the attacking third and Juan Jesus' inexperience continues to provide a little nervousness to the defence.
Leaders of the side in Esteban Cambiasso, Javier Zanetti, Walter Samuel and Diego Milito will be able to make up for this inexperience to an extent, but victory over Milan is no sign that the Nerazzurri can validate some claims that they are capable of winning the title.
Expectations must be quelled in the aftermath of such a vital win until Inter can prove that they can break down the smaller sides who will not afford them the opportunity to counterattack as much as they did against Milan.