After Bernardo Silva had given the visitors a fifth-minute lead, Kun Agüero doubled the lead shortly before the half-hour mark, as City strolled to a comfortable win in west London.
The win sees Pep Guardiola's men go top by a point, as title rivals Liverpool play Tottenham Hotspur at Anfield on Sunday. The Cottagers meanwhile could see their immediate relegation back to the Championship confirmed in midweek away to Watford.
Many had predicted something of a rout on the banks of the Thames on a sunny, early spring lunchtime in the capital, and any fears of a home humiliation were raised as Bernardo Silva took just five minutes to open the scoring.
Moments after Aguero almost drew first blood for the visitors, the Argentine set up the Portuguese. After City won the ball in midfield, Aguero held up the ball and slid the ball wide for Bernardo, who cut in and around the home defence and curled a shot past Sergio Rico into the far corner, from the edge of the area.
The goal led to a growing wave of possession and pressure from Pep Guardiola's men with almost total domination of the ball, which led to gallows humour, with cheers from the Craven Cottage stands when their side were allowed momentary control.
It seemed certain a second would follow at any point, but to their credit Fulham held strong and kept the deficit to just a single goal. The hosts even began to venture forward, but without the presence of the injured Aleksandar Mitrovic, caretaker boss Scott Parker could only watch from the sidelines and scratch his head.
City continued to press and forced the error which led to the second. As full-back Joe Bryan looked for space, the Whites' defender was caught out with a poor short ball, as Bernardo again pounced.
Having notched the opener, the midfielder then turned provider to slip Aguero in behind a forlorn Fulham back line and from an angle, the Citizens' hitman dinked his effort into the far corner of the net.
Fulham were beginning to find their way into the game and could have grabbed a goal back before the brek after Ryan Sessegnon's cut-back across the goal could not find Ryan Babel, and was palmed away as Ederson was forced into a rare piece of action.
Save for a few glimpses for the west Londoners' fans to savour, Fulham went into the interval with a sense of resignation about their afternoon to come.
City cruise on Thames
The second half evolved into somewhat of a Thameside stroll for the visitors, with Fulham unable to get any sort of foothold in the game.
City however continued to seek more goals, with Nicolas Otamendi skied shot from Kevin De Bruyne's cut-back into the 18-yard box, raising ironic cheers, before going somewhat closer from the Belgian's free-kick, which Fulham stopper Rico just reached to punch away in time to deny a free header on goal for the Argentine.
As the game ticked on with the tempo having dropped off, the visitors switched to attention their upcoming commitments in search of an unprecedented quadruple this season, as Guardiola opted to rest a number of key players.
Indeed, perhaps the biggest moment of note was the enforced withdrawal of Aguero just before the hour mark after picking up a slight groin problem. The visitors will hope it is nothing more than a precaution ahead of Wednesday evening's game at home to Cardiff City.
Raheem Sterling endured somewhat of a frustrating afternoon after his international exploits against the Czech Republic last week, but almost turned provider late on as the winger fed his overlapping Three Lions teammate Kyle Walker with a chance from close-range late on, only for Walker to clatter the outside of the post.
Fulham almost sneaked a consolation from free-kick as Babel's delivery deflected goalwards, but Ederson was to his credit alert to gobble up the loose ball after being a spectator for much of the 90 minutes.
It had not transpired to be the demolition some had predicted, but nevertheless the gulf in class was painfully apparent in west London, as City cruised to another vital three points to return to the top of the table. For Fulham however, the trapdoor to the second level of English football creeps inexorably closer.