The Liverpool boss had never beaten United in eight previous league games, with the champions having won the last five meetings between these two giants.
But United wilted under a relentless second-half pressure, had Nemanja Vidic sent-off and saw substitute Babel secure victory.
Carlos Tevez put United ahead early on. But after a torrid opening period, Liverpool were level with a Wes Brown own goal before Liverpool dominated the second half and grabbed a priceless win with 13 minutes left.
Liverpool gave new signing Albert Riera his debut but Steven Gerrard and Fernando Torres were not risked any closer to the initial action than the bench.
For the champions, Michael Carrick returned after an ankle problem, but all eyes were on £30million striker Dimitar Berbatov on his first appearance for his new club.
Liverpool fans staged a march to the ground from a local pub to protest at the club's American owners.
But that did not stop co-owner George Gillett taking his place in the directors' box, although not in the front row close to the fans.
There was also a row of smartly-suited Americans, all singing along to "You'll never walk alone'' - the anthem moved to seconds before kick-off rather than when the teams march out, presumably to unsettle United.
Player of the Match : Ryan Babel (Liverpool)
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