Goals from Damien Delaney, David Norris and a brilliant individual effort from Connor Wickham completed a hat-trick of League wins for Town as the Blades finished with nine men.
Delaney gave Blues the lead on 28 minutes with a thumping header, Norris extending the advantage early in the second-half with a volley to take his tally to nine for the season.
Grant Leadbitter had a penalty brilliantly saved by Steve Simonsen 10 minutes from time but Wickham sealed the win with a superb individual run over half the length of the pitch, beating three defenders and Simonsen before planting the ball in the net.
Rob Kozluk was red carded as the frustration of the visitors boiled over, Lee Williamson also shown a red for two bookings seconds later. Town's day was completed when Luca Civelli came on for his first appearance in almost two years.
Paul Jewell kept with the same side that beat Derby in midweek, Jimmy Bullard receiving a rousing reception from the Town fans as he made his home debut.
Sheffield started the better side, Gareth McAuley blocking Richard Cresswell's cross then Michael Doyle firing over the bar.
Former Town striker Marcus Bent tested Marton Fulop from the angle of the box, while at the other end Lee Martin couldn't find the space to have a shot after Tamas Priskin set him up.
A surging run from Martin won a free-kick for Town on the edge of the box, Bullard seeing his 25 yarder comfortably saved by Steve Simonsen.
Connor Wickham exploded a left foot volley just wide of the far post before Town got the breakthrough on 28 minutes. Norris' cross was handled just outside the box, Bullard floated over a free-kick and Delaney was left alone to thump his header into the net.
Grant Leadbitter had an anxious look as his miskick from Elian Parrino's cross flew across goal with Carlos Edwards doing enough to divert the ball behind, Fulop holding firm from Cresswell's cross just before the break as the Blades threatened an equaliser.
Wickham was denied by Parrino after Norris forced the ball into his path as the second-half got underway, while at the other end Fulop had to be alert to stop Daniel Bogdanovic.
Norris put Town firmly in the driving seat eight minutes into the second-half, the skipper doing superbly to volley in at the far post from Delaney's cross.
Priskin was a coat of paint away from adding a third a minute later, the Hungary international hitting the post as Town threatened to clinch the points before the hour, Leadbitter going close soon after with a volley.
Sheffield used all their substitutions by 60 minutes as Micky Adams juggled his pack, with Stephen Quinn, brother of Town's Alan, Mark Yeates and Kozluk joining the action, Bent one of the three who made way.
Bullard found Leadbitter on the edge of the box from a corner - the former Sunderland player's volley deflected wide, Martin then slashing a shot into the sidenetting.
Leadbitter had a great chance to seal the points on 80 minutes when Priskin was fouled by Lowry in the box but Simonsen saved superbly from the penalty spot.
The Blades' keeper kept out Norris' drive before Blues made a first change with Bullard replaced by Colin Healy six minutes from time.
Wickham tied up the points on 87 minutes with a brilliant individual goal before Sheffield were reduced to nine men, Kozluk and Williamson the guilty men.
The win sees Blues record a hat-trick of League victories for the first time since the end of the 2008/09 season and the first since 2007 under the same manager.
Town: Fulop, Edwards, McAuley, Delaney, Kennedy, Martin (Civelli 90), Norris, Leadbitter, Bullard (Healy 84), Wickham, Priskin (Scotland 90). Subs not used: Lee-Barrett, Peters, Smith, O'Dea.
Sheff Utd: Simonsen, Parrino (Kozluk 60), Collins, Ertl, Lowry, Williamson, Montgomery, Doyle (Quinn 56), Cresswell, Bent (Yeates 56) , Bogdanovic. Subs not used: Long, Jordan, Calve, Lowton. Sent-off: Kozluk, Williamson. Booked: Doyle, Lowry, Williamson.