Young winger Jorge Taufua scored twice for the Sea Eagles as they ran in 23 unanswered points following Souths' opener just five minutes into the match.
The result means Souths drop to third on the NRL ladder with the Sea Eagles just behind them in fourth.
Halfback Adam Reynolds continued to press his claims for rookie-of-the-year honours with a precise kick that allowed second-rower Chris McQueen to set up Sam Burgess for the opening try of the match.
But that was as good as it got for the Bunnies, with Dean Whare scoring just three minutes later to cut the deficit to two.
Taufua then scored his first of the night in the 34th minute before a Daly Cherry-Evans field goal on the stroke of halftime gave Manly a three-point lead at the break.
Brett Stewart and Kieran Foran combined to put Taufua over as Manly ran away with the game in the second half.
Reynolds tried to spark the Rabbitohs into life but their attack faltered and their winning run came to a sudden halt.
The result was put beyond doubt in the final 10 minutes when David Williams crossed for the Sea Eagles' fourth try after some great build-up play by skipper Jamie Lyon.
Hooker Matt Ballin then completed the win with his first try of 2012 in the final minute.
Manly coach Geoff Toovey was pleased to pick up the points in a tough game.
"We'll take the positives out of the game, I thought we did a good job defensively," Toovey said.
"We've had a tough couple of weeks with the travel. Tonight was a bit of a home game for us, we have played here before - it's a great venue."
South Sydney coach Michael Maguire said that it was a good lesson for his side not to go away from their game plan and that failure to complete sets in the second half put unnecessary pressure on the team.
"There's a lot of disappointment in the changing room, but as a group we got a lot out of it as well," Maguire said.
It was left to Souths co-captain Michael Crocker to sum up the difference between the two sides.
"I think they played semi-final football and we didn't," he said.
"They were excellent, that's a premiership winning team right there."