Two second-half goals cost the Bluebirds second place in the division as their promotion rivals from across the Severn deserved the win.
Brian Tinnion slotted home a 48th minute spot kick and former Bluebird Christian Roberts drove in the clincher 15 minutes from time. It was a bitter defeat for City boss Lennie Lawrence who was celebrating his 55th birthday.
"The penalty was definitely the turning point in the game," he said.
"Not many officials would have given a penalty as they seemed to be very little going on.
"Once they had scored from that we had to chase the game but in all honesty our passing was not up to the mark, our luck was out and generally we were not good enough." Bristol City manager Danny Wilson was understandably please with his side's display.
"I think we showed even more character than last season when we came here and won 3-1," he said.
"Today I had a big performance from every player as we had to be disciplined throughout the match and keep a positive attitude.
"The first half was even and we got our noses in front with that penalty early in the second half. Cardiff then had to push forward but we defended well and still looked dangerous on the counter-attack.
"It is a very good result for us to beat everyone's favourites for promotion but it is still too early to say anything yet about our own chances.
"I hope we get the recognition we deserve for this victory but I still think that Cardiff City are the team to be above at the end of the season if we want promotion." Roberts, the former Cardiff City player who scored the clinching second goal, found it difficult to react after hitting the net.
"I loved my time here at Cardiff and still think a lot of the club but I came here to do a professional job," he said.