Preston central midfielder and 18-year-old debutant Matthew James, on loan from Manchester United, opened the scoring in the tenth minute.
He fired into the bottom right corner from 20 yards after left winger Ross Wallace had found Preston striker Jon Parkin on the left.
He beat his man and crossed to Danny Welbeck, who laid the ball to James whose shot was deflected beyond Blades goalkeeper Ian Bennett.
Twenty one-year-old central midfielder Paul Coutts, signed from Peterborough United on January deadline day, had a long-range shot hit a defender and loop into the gloves of Bennett after 14 minutes.
Parkin held off his man and turned and hit the underside of the crossbar with a sweetly struck half-volley over the keeper from a Wallace flicked pass after 28 minutes.
Sheffield United almost scored from the restart when Mark Yeates was through on goal and drilled a shot from the angle which hit Preston goalkeeper Andrew Lonergan and bounced off the far post and away in the 46th minute.
Parkin beat two men and had a 30-yard low left-foot shot saved and Kyle Bartley was booked by referee Eddie Ilderton from Tyne and Wear for a foul on Welbeck in the 57th minute.
Jamie Ward replaced Stephen Quinn in the 58th minute.
Henri Camara replaced Ched Evans in the 64th minute.
Darius Henderson replaced Richard Cresswell in the 72nd minute.
Wallace crossed to Welbeck and Nyron Nosworthy fouled him in the box and the referee awarded Preston a penalty.
Parkin's spot-kick went slightly to the keeper's left and was parried but the rebound was tapped home low into the middle to make it 2-0 in the 71st minute.
Keith Treacy replaced Chris Sedgwick in the 78th minute.
Derek Geary crossed to Mark Yates who took the ball down on his chest and volleyed into the bottom right from eight yards in the 81st minute.
Coutts fouled Ward and was booked in the 88th minute and Chris Brown replaced Wallace two minutes later.
Darren Carter replaced man-of-the-match James right at the end.