Phillips penalty secures victory over the Red Devils.
Sunderland came from behind to knock Manchester United out of the League Cup as Kevin Phillips’ extra-time penalty booked a place in round five for Peter Reid’s side.
Dwight Yorke's opener for the visitors had been cancelled out by Julio Arca in front of over 47,000 at the Stadium of Light.
Yorke was sent off eight minutes from the end of normal time for a late tackle on Emerson Thome.
The game began after a minute's silence following the death of Sunderland favourite Len Shackleton at the age of 78.
The hosts were limited to two speculative long-range efforts from midfielder Alex Rae in between Yorke mis-kick for United at the other end.
Sunderland did threaten when Danny Dichio headed narrowly over from a Rae corner after 22 minutes.
United took the lead in a sweeping counter-attacking move as Jonathan Greening and Yorke linked up with the Trinidadian finishing calmly.
Greening was then narrowly wide with a 20-yard effort before the visitor's 19-year-old defender John O'Shea produced a timely tackle on Phillips to deny the striker a shooting opportunity.
Phillips saw a 20-yard left-foot curler come off the bar after 43 minutes and, two minutes after the interval, had a well-struck angled shot saved by United goalkeeper Raimond Van der Gouw.
Arca rescued Sunderland with an equaliser after 74 minutes as Phillips’ corner was met by the Argentinian whose header was too powerful for Van der Gouw.
To make matters worse for the visitors, Yorke was red-carded for a bad tackle on Sunderland's Brazilian defender Thome.
Phillips was denied with two late shots and extra time was needed to settle the tie.
Phillips duly did so when he picked himself up after winning a penalty conceded by O'Shea and beat Van der Gouw from the spot.
United played commendably with 10 men and twice struck the Sunderland crossbar through Danny Webber and David Healy, but the home side held on.
Sunderland: Sorensen (Macho, 90), Makin (McCann, 45), Gray, Thome (Varga, 87), Craddock, Williams, Arca, Rae, Hutchison, Dichio, Phillips.
Subs not used: Schwarz, Quinn.
Man Utd: Van Der Gouw, Clegg, P Neville, Johnsen (Stewart, 84), O'Shea, Wallwork (Webber, 110), Greening, Fortune, Chadwick (Healy, 90), Yorke, Solskjaer.
Subs not used: Rachubka, Djordjic.