Ademola Lookman and Ivan Cavaleiro gave Fulham’s survival bid fresh hope on a night of redemption.
Lookman and Cavaleiro had both blown penalties for the struggling Cottagers previously in costly narrow losses.
But they both netted here as Lookman, who attempted an ill-advised panenka spot-kick at West Ham, was clinical for an opener.
Attacking colleague Cavaleiro, who slipped taking a penalty at Everton last time out, then buried his effort from 12 yards.
The deserved victory lifted Scott Parker’s men out of the bottom three.
Boss Parker said: “I was very pleased and relieved for Cav that he scored.
“We’ve missed some big penalties and it’s cost us some big points but we’ve scrutinised everything possible and I’m pleased it worked.
“The courage and bravery after his slip, those are the things we need.
“Ade earned the right to score his goal too after he came under a lot of stick a few weeks ago for that penalty and rightly so.
“It is a massive three points and a big performance.
“I was involved in two relegations and we are going to be in and around it.
“We have to be comfortable around it.
“You have to have a total belief and I believe in this team.”
Cavaleiro said: “The manager gave me confidence to take again and I did it.”
Fulham No.19 Lookman held up the late Papa Bouba Diop No.19 Senegal shirt after notching.
Parker added: “Ade showed respect tonight by scoring and putting up the shirt, that was pleasing.”
Leicester, fresh from reaching the Europa League knock-out stage, were twice denied by the woodwork at 0-0.
They blew a chance to go second despite Harvey Barnes pulling a goal back in a third defeat in four home League games.
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Foxes coach Brendan Rodgers , who previously had a 100 percent record against Fulham, said: “It was a disappointing evening for us.
“We didn’t show enough quality, they deserved to win.
“We have to get back to the basics.”
Leicester were unlucky not to take the lead in the 19th minute after Youri Tielemans volleyed a superb left-foot effort from outside the box which came back off the post.
Wesley Fofana then hit the bar with a follow-up effort in an extraordinary sequence.
The visitors stormed ahead in the 30th minute when Lookman rolled in a cool low right-foot finish.
Andre-Frank Zambo Anguissa created the chance with a surging run through the middle on the break before releasing Lookman to do the rest.
It was 2-0 just eight minutes later when referee Simon Hooper belatedly gave a penalty after being alerted by VAR to consult the monitor.
Replays showed Christian Fuchs had caught the rampaging Bobby Decordova-Reid.
Cavaleiro took the spot-kick and slammed in a high right-foot shot.
It ensured Fulham avoided the ignominy of being first Premier League team to miss three penalties in a row.
Rodgers made two changes at the break but Fulham could have wrapped it up only for Kasper Schmeichel to deny Lookman.
The visitors then had to hang on when City pulled a goal back from replacement Barnes who slammed in a left-foot half-volley four minutes from time.
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