Alexander Isak's goal seven minutes into the second-half proved enough for the home side, who had been totally outplayed in the first 45.
City's dominance wasn't rewarded in that opening period, however, despite creating a number of decent half-chances.
Rico Lewis came within a whisker of levelling in the final few minutes, but it wasn't to be on this occasion.
With City making eight changes and Newcastle 10 from the weekend Premier League fixtures, both managers took the opportunity to give vital minutes to some players who don’t get as many first team minutes as others.
But if the home side felt that would disrupt City’s style of play, and movement around the pitch, they were mistaken.
The first 30 minutes were one of near-total dominance by the Blues who enjoyed 73% possession.
The Magpies were almost completely camped in their own final third and City’s first real opportunity came when the impressive Oscar Bobb drove forward, fed Julian Alvarez and only the outstretched foot of Nick Pope prevented an opening goal.
Bobb and Alvarez linked well again on 30 minutes, with the Argentina striker lashing an angled shot across goal without troubling Pope.
On 33, Josko Gvardiol was desperately unlucky not to nod home a corner with the ball striking the back of a Newcastle defender’s head with a goal looking certain.
Of course, the longer City didn’t make the chances and possession count, the more likely it was that Newcastle would muster something in the way of an attack up – and on 41 minutes, a counter-attack from the hosts saw Jacob Murphy with only Stefan Ortega Moreno to beat – but as he so often does, the German keeper stood tall and made a fine save.
As a result, the teams went in goalless at the break – though the vocal following of City fans must have wondered how their team didn’t go in at least a couple of goals to the good.
The home side brought on Bruno Guimarães and Anthony Gordon for the start of the second-half as Eddie Howe attempted to change the dynamic of the game – and it had an effect immediately, with City suddenly penned back and as the hosts' physical approach finally woke up the home support.
With City making a number of errors in possession, Newcastle finally broke the deadlock as Joelinton’s low cross found the unmarked Alexander Isak at the back post.
From a passive, almost disinterested first 45, the home team were launching into challenges and cheerleading the crowd, and City were on the ropes.
In what was becoming an increasingly fractious affair, there was a flurry of yellow cards handed out by the referee in his attempts to stop the game boiling over.
That said, Pep Guardiola picked up a yellow card after venting his frustration, first for a challenge on Bobb then a clumsily kick on Gomez by the already-booked Guimarães.
City had rarely troubled Pope in the second period, but Matheus Nunes looked to be in on goal with 82 minutes played -only for Tino Livramento to make a well-timed challenge and deny the Portuguese.
Lewis fired inches wide as the clock tickled towards 90, but though the Blues were far more potent in the closing stages, the home side stood firm in the time that remained.
Bobb shines on debut
Norwegian 20-year-old Oscar Bobb showed why he’s been in and around the senior team this season with a composed display of attacking football.
The youngster seemed to visibly grow in confidence as each minute passed.
He has a style that seems to glide around the pitch, was always available and regularly found space for his team-mates to play him a pass in.
He showed some delightful footwork in tight spaces and threaded some excellent passes in and around the box.
On this evidence, we’ll be seeing a lot of our ‘other’ Norwegian this season!
NEWCASTLE XI: Pope, Livramento, Lascelles (c), Dummett (Schar 90+4), Targett, Hall (Gordon 46), L Miley (Guimarães 46 ), Tonali (Anderson 90), Murphy, Joelinton , Isak (Almiron 62)
Subs: Ederson, Carson, Walker, Dias, Haaland, Hamilton
What it means
City's Carabao Cup adventure ends at the first hurdle, though facing an in-form Newcastle United on their own patch was always going to be a testing 90 minutes.
Perhaps most important of all, given our current injury issues, there seemed to be no fresh causes for concern in this game and several players got much-needed minutes under their belt.
“First congratulations to Newcastle, for going through.
“A big compliment to the players, I told them in the locker room, for the way that we played compared to last season against Southampton, we were there.
“We were brilliant first half, and of course for the way we played.
“I think Newcastle couldn't accept (City’s first half dominance), they increased the rhythm and aggression and kicking, and they were there, more aggressive.
“We struggled a little but that’s normal. I said at half time the second half will not be like the first.
“I don’t know how many fouls they did and how many we did but we had double yellow cards. It is what it is.
“I said to be there in the bad moments, and we were there. At the end we could not win, with the crowd. Congratulations to Newcastle."
Our next game is against Wolverhampton Wanderers in the Premier League this coming Saturday afternoon, with the game at Molineux getting underway at 15.00pm (UK).