Victory in the derby du Rhone on Sunday leaves Les Verts six points ahead of Lyon with only seven fixtures remaining this season.
Despite being the most decorated club in the history of French football, Saint-Etienne last finished above Lyon back in 1993, but their 2-1 win this weekend reinforced their dominance this campaign.
Christophe Galtier and his players are now only three points behind third-placed Lille and can focus on chasing a Champions League spot rather than looking nervously at Lyon advancing behind them.
It is a testament to Galtier that Saint-Etienne find themselves within touching distance of a position in the top three, and the derby victory over Lyon demonstrated the respect his players have for him.
Saint-Etienne usually play in a 4-4-2 formation, but against Les Gones, Galtier changed to a more attacking 3-5-2 to crowd the midfield and suppress Lyon's creative players.
Galtier revealed after the match he told his players of the change only 45 minutes before kick-off. (h/t Ligue1.com)
My players found out about the way we would play at 19:15 in the dressing room. I wanted to play with a three-man defence to push up on the flanks. My system allowed us to combat the comfort Lyon have with their diamond-shaped midfield. We had to densify the midfield and our positions up front. That was impossible in a 4-4-2. It worked because the players are intelligent.
The system worked brilliantly.
Saint-Etienne had two great chances to open the scoring in the opening 30 minutes. First Francois Clerc forced a good save from Anthony Lopes before the Lyon stopper denied Mevlut Erdinc from close range.
When Les Verts did score, it was fully deserved. Galtier's 3-5-2 system allowed wing-back Benoit Tremoulinas time and space to deliver a deep cross into the box. This was nodded down by Brandao and Erdinc nipped in front of Lopes to stab home the 70th goal of his Ligue career.
Galtier's players worked exceptionally hard for him throughout the 90 minutes, but after Lacazette levelled for Lyon, it required a further tactical masterstroke from the Saint-Etienne coach to secure victory in the second half.
Erdinc, the goalscorer, was hauled off with 20 minutes remaining, as Galtier introduced the pace and trickery of Max Gradel into the fray. The Ivorian made an immediate impact, creating and finishing what proved to be the winning goal.
It was Gradel's neat flick that released Renaud Cohade down the right flank, and after his low cross was parried out by Lopes, the substitute was there to sweep home into the far corner of the net.
It is a testament to Galtier how well his players responded to the tactical changes in the match. Starting with a different set-up to their usual formation, particularly in such a hotly contested derby match, would be difficult for most teams, but Saint-Etienne adapted brilliantly.
As Gradel demonstrated, those players who do not make the starting 11 are willing to work hard for their manager; a sign of a team full of confidence and belief. Galtier shared the Manager of the Year award with Carlo Ancelotti last campaign, and his impressive work with Les Verts this season has further increased his stature as a coach.
Saint-Etienne have not been out of the top half of Ligue 1 since January last year. At this rate they may well catch Lille and secure a Champions League spot. Even if that feat is not achieved, Galtier and his players deserve great credit for their performances this season.
Olympique Lyonnais have been the dominant club in the Rhone area for decades. However, if Saint-Etienne keep up their impressive form, that order will be reversed, and Les Verts will have the bragging rights of the region.