Filip Helander's thumping second-half header saw Rangers beat Celtic 1-0 at Ibrox in the first Old Firm meeting of the season.
Helander's 66th-minute goal proved the difference between the two rivals in what was a tight and cagey contest between the Glasgow rivals.
Both sides could have scored before half-time, only for Celtic striker Odsonne Edouard to somehow miss from six yards out, before Rangers winger Ryan Kent hit the post.
But Rangers - with manager Steven Gerrard not in attendance after a recent Covid-19 outbreak at the Scottish Premiership champions - held on to move third in the table and open up a three-point lead over Celtic, who stay sixth.
Rangers: McCrorie (8), Balogun (9), Goldson (7), Helander (7), Barisic (7), Kamara (7), Davis (7), Aribo (7), Roofe (7), Morelos (7), Kent (7)
Subs: Lundstram (6), Sakala (6), Arfield (6)
Celtic: Hart (7), Ralston (6), Starfelt (6), Welsh (6), Juranovic (6), Christie (6), McGregor (6), Turnbull (7), Abada (6), Edouard (6), Furuhashi (8)
Subs: Soro (6), Rogic (6), Montgomery (6)
Man of the match: Leon Balogun
How Rangers grabbed early title advantage
With no Celtic supporters at Ibrox, Rangers tore into their opponents right from the kick-off in what was a frantic opening, albeit without testing Joe Hart in the visitors' goal.
There was just one shot on target in the first period, although it was Ange Postecoglou's team who would have gone in ahead at the break but for an incredible miss by Edouard 25 minutes in.
The always-dangerous Kyogo Furuhashi broke down the left, before crossing for the forward, who just had to hit the target from six yards, only to mis-hit his shot wide of the gaping goal in a horror miss that summed up the Frenchman's lacklustre display.
The hosts, too, could have scored just past the half-hour mark, only for Kent's low curler from the edge of the area to beat Hart, but not the post as the two fierce rivals went in level at the interval.
Rangers made three changes to the side that drew 0-0 in Armenia on Thursday, with starts for Ryan Kent, Kemar Roofe and Robby McCrorie, who made his first-ever Old Firm appearance with both Allan McGregor and Jon McLaughlin still not in the squad.
Ange Postecoglou made two changes to the team that lost 2-1 at AZ Alkmaar on Thursday, with recent new signing Josip Juranovic replacing the injured Greg Taylor at left back, while France striker Odsonne Edouard also got the nod in attack.
However, the breakthrough did finally come midway through the second period when from another dangerous Borna Barisic corner from the left, floated high to the far post, there was Helander to power home a close-range header that sent the whole of Ibrox into delirium.
Celtic could and should have levelled immediately, but Robby McCrorie - on his first-ever Old Firm appearance - did well to block Furuhashi's shot, before using his legs to do the same late on as Rangers held on for a deserved and potentially crucial win.
Man of the Match - Leon Balogun
Balogun was brought in from Wigan Athletic last summer and what a smart piece of business that now looks a year on.
The versatile defender, who featured at right-back instead of Nathan Patterson on Sunday, played a pivotal role in defence in helping Rangers win last season's Scottish Premiership and he has continued that impressive form at the start of this campaign.
And it was no surprise to hear Rangers assistant boss Gary McAllister sing the 33-year-old's praises at the end of the match after his role in helping the hosts to a vital clean sheet as the champions extended their unbeaten run over Celtic to seven games, their best sequence since Dick Advocaat was in charge.
What the managers said...
Rangers assistant boss Gary McAllister: "Fantastically pleasing, it has been a very strange three or four days, players playing with injury today, no idea who was available right up to this morning with Covid and close-contact protocols.
"But you have seen a club coming together today and wow, the fans were outstanding. I thought from one through to 11 we were outstanding, but if I had to pick one, Leon Balogun was superb and his defensive display shows why we brought him here. He really stood out today and that was a proper man's performance.
"A lot has been thrown at us in the last two or three games and I thought today we looked more recognisable."
Celtic boss Ange Postecoglou: "We are disappointed, it was a tight game that could have gone either way. The first goal was always going to be important, we fell behind, but we had a couple of good chances towards the end.
"When you know the game is going to be tight, it is a derby game, there is not going to be a lot of open space out there or opportunities, so getting that first goal was always going to be important. We did not and unfortunately, we paid the price.
"It was a tight game and one in which we needed to get a foothold in by taking our chances."
John Hartson: "There was not much between the two teams. Celtic played very well, they got on the ball early on and the Edouard chance has to go in. It is such a huge moment in the game and the difference then is Rangers come out in the second half after a telling-off from Gary McAllister, they got better in the second half and the difference between the two teams is when the ball goes into the Rangers box, they head it out. When the ball goes into the Celtic box, they do not have the defenders at this moment in time...
"But there was hardly anything in the game and the difference was when Rangers went ahead, they managed the game out very, very well and little moments in big games settle it and it was a shame Edouard could not stick it away. Ultimately, there was nothing in the game, but Rangers saw it out when they went 1-0 up."
Kris Boyd: "Rangers are back to where they were last season. They defended their box, any balls that were thrown in there from corners or free kicks, Rangers defended their box properly. It is a crucial part of the game set plays and Rangers have managed to find a winner from one as there is still more to come from Rangers in the final third going forward, with Alfredo Morelos and Ryan Kent not at the levels we have seen from them."
When the season resumes after the upcoming international break, Rangers travel to St Johnstone on Saturday September 11, with the match live on Sky Sports Football at 12.30pm.
Meanwhile, Celtic take on Ross County at Celtic Park on the same day, with the game kicking off at 3pm.