Jack Colback and Connor Wickham both went close but Town went down to a third successive Championship defeat.
David McGoldrick gave Forest the lead early on and the home side doubled their advantage just before the break with Lewis McGugan scoring one of the goals of the season, beating Marton Fulop with a swerving 35 yard free-kick.
Colback hit the bar for Blues and Wickham was twice denied by Lee Camp as Forest stretched their unbeaten home record in the Championship to 26 games.
Fulop returned to the Town side after recovering from a back injury, with Roy Keane also recalling Jaime Peters, Andros Townsend and Carlos Edwards to his starting line-up.
Forest had manager Billy Davies back in the dug-out after he missed their last two games through a virus and he only had to wait until the 13th minute for a reason to celebrate, McGoldrick finding the net from six yards after Chris Cohen had found space down the flank.
Radoslav Majeswski went close to adding a second soon after, beating Grant Leadbitter on the edge of the box but then dragging his shot wide.
David Norris fired wide as Town looked for a quick response to going behind and the equaliser almost came on 19 minutes,
Colback hitting the bar after good play and Norris denied by an excellent Camp save in the follow up.
Jason Scotland was crowded out inside the box, while at the other end McGugan blasted a shot just wide.
The Forest youngster had the City Ground crowd on their feet just before the break though. Leadbitter was booked for a foul on Cohen and McGugan blasted home from 35 yards.
Town made a change at the break, Wickham on for Scotland and Blues threatened to reduce the arrears as the second-half got underway, Townsend having a shot deflected wide then Tommy Smith testing Camp in the home goal.
Blues made a second change on 56 minutes, Jake Livermore on for Peters and the Tottenham loanee was immediately in the action - countering the threat of Paul Anderson with a terrific challenge.
McGugan sent in a quality cross that just evaded Anderson, Damien Delaney then getting in the way of a McGugan shot.
Townsend made way for Ronan Murray for the last half hour, the Republic of Ireland U19 international impressing as a substitute in the midweek defeat at Watford.
Forest made their first change with Majeswski making way for Nathan Tyson midway through the half.
The Forest substitute had a penalty appeal turned down after tangling with Gareth McAuley within a minute of his entry, Tyson then slicing his shot well wide from a good position.
Guy Moussi replaced McGoldrick for the last quarter hour as Forest looked to defend their lead, leaving Tyson up front on his own.
Leadbitter tested Camp with a free-kick, the 'keeper then dealing with a Wickham effort.
Wickham had a penalty appeal turned down, Leadbitter then released the England U19 international inside the Forest box but Camp came to the home side's rescue with another excellent save.
McAuley and Fulop combined to stop Tyson as he looked for a Forest third as the game entered the final minutes, the striker then slipping over as he raced in on goal.
Wickham was denied again late on by Kelvin Wilson but Town couldn't find a way past the impressive Camp as Blues went down to a third successive defeat for the first time since February 2007.
Nottm For: Camp, Chambers, Morgan, Wilson, Gunter, Anderson, McKenna, McGugan (Adebola 83), Majeswski (Tyson 67) Cohen, McGoldrick (Moussi 74). Subs not used: McCleary, Blackstock, Darlow, Earnshaw.
Town: Fulop, Peters (Livermore 56), McAuley, Delaney, Smith, Edwards, Norris, Leadbitter, Colback, Townsend (Murray 62), Scotland (Wickham 46). Subs not used: Murphy, Brown, Eastman, Priskin. Booked: Leadbitter.
Att: 22, 935