Nice's French defender and captain Paul Baysse celebrates after scoring a against Lyon on October 14, 2016
Nice captain Paul Baysse volleyed in a fifth-minute strike at the Allianz Riviera while Jean-Michael Seri swept in a second on 76 minutes to send Lucien Favre's men four points clear at the summit.
Mario Balotelli had a penalty saved late on as Nice extended their unbeaten start to the campaign, but Lyon slumped to a fourth defeat in nine matches after they were forced to play a man down for over an hour with Nabil Fekir dismissed for an ugly stamp on Baysse.
"We beat a good Lyon team. We will enjoy it but we'll carry on with our philosophy of going match by match," said Favre.
"The league season is very long. It's good to be first and we've started the competition well but we have to keep on working."
Lyon face Juventus at home in the Champions League next week, and the return of Alexandre Lacazette off the bench will at least have provided some comfort with the France striker missing the last month through injury.
Earlier, Toulouse roared back from a goal down to stun Monaco and maintain their impressive early-season form under Pascal Dupraz, whose side had already beaten reigning champions Paris Saint-Germain.
Valere Germain headed in Gabriel Boschilia's free-kick to put Monaco ahead with just three minutes gone in Toulouse, but the home side hit back through Oscar Trejo midway through the second half.
Martin Braithwaite, whose header had set up Toulouse's equaliser, then struck twice in the final 10 minutes to fire Toulouse up to third, ahead of PSG and to within two points of Monaco.
"In the second half our opponents were better than us. You have to congratulate them for that. Toulouse are a good team with quality players," said Monaco coach Leonardo Jardim, whose team travel to CSKA Moscow in the Champions League on Tuesday.
Unai Emery will be without several players, including Angel di Maria, Serge Aurier and Layvin Kurzawa, for PSG's trip to bottom side Nancy on Saturday, although leading scorer Edinson Cavani is expected to start.