The Sheffield side, at one stage ten points clear of the drop zone now have a fight on their hands and a big game at Bramall Lane in seven days time against West Ham.
Newcastle, after a disastrous month which saw them pick up one point from 12 and be knocked out of the UEFA Cup, were handed a half chance early in the game. The Blades back four were slow to pick up Antoine Sibierski, who finished with a low right-foot strike but he miscued, dragging the ball wide of the far post from eight yards.
Top scorer Obafemi Martins caused problems as he chased a long ball shadowed by United skipper Phil Jagielka. The Nigerian striker drifted wide and stumbled under a clumsy challenge from Paddy Kenny as the ball was cleared.
The Bramall Lane side, whose miserable run has seen them dragged back into the relegation dogfight, went close as midfielder Mikele Leigertwood drilled a left-foot strike inches over the target before the visitors snatched the lead on 17 minutes.
Damien Duff pumped over a precise cross from the left, James Milner headed to the feet of Martins who finished clinically from 16 yards steering the ball beyond Kenny's reach into the far corner.
Duff almost snatched a second minutes before the interval after running across the face of the Sheffield area to finish with a low shot which flashed a fraction wide of the woodwork, before Chris Lucketti squandered an opportunity, steering his header straight at Shay Givens from point-blank range.
The Newcastle winger outpaced his marker minutes after the re-start linking cleverly with the impressive Martins, but he rushed his shot slamming the ball into the sidenetting from just inside the area.
Kenny blundered in the 63rd minute after Jagielka miscued as he tried to cut out a long ball upfield. Kenny raced to the corner and should have cleared but was robbed by Martins, who from an impossible angle hit the foot of the post and Sibierski, following up, slammed the ball over the empty goal and into the stand.
The Sheffield side, outplayed by Newcastle, were inches away from scoring when ex-Newcastle winger Keith Gillespie pumped in a low cross and substitute Christian Nade's diving header flashed the wrong side of the bar.
And it was Gillespie who set up Nade's 70th minute leveller, drilling in a cross which Newcastle failed to clear, before Nick Montgomery picked out the Frenchman, who finished from close range.
Newcastle snatched the winner ten minutes from time, with a text book goal , Taylor heading in Milner's corner from six yards.
In a nail-biting finish Given produced a stunning stop to keep out substitute Danny Webber.