Victory for 'Les Verts' also saw them grab three vital points in their bid to retain their elite status as they moved seven points clear of third from bottom Le Mans, who lost 2-1 to Lens on Saturday.
Monaco's defeat left them nine points adrift of champions and leaders Bordeaux, who hold just a three point advantage over Montpellier after the former lost 4-2 at Rennes on Saturday and the latter beat second from bottom Boulogne-sur-mer 2-0.
Monaco slipped a place in the table to sixth after League Cup finalists Marseille completed a successful week by overwhelming Valenciennes 5-1, 6million euro signing Brandao grabbing one of the goals to make it three in the last two games for the Brazilian.
Marseille - who head Monaco on goal difference - look good value for a Champions League place as they have a game in hand on third-placed Lille.
Marseille coach Didier Deschamps lauded his players for their all round display, which showed a marked improvement from the 2-0 defeat last weekend to Montpellier but refused to beleive that the title was out of reach.
"While I wasn't at my wits end last weekend, I am not going to dance on the ceiling this evening," said the 41-year-old.
"I do not want to say that this evening we are back in the title race.
"We just have to stay calm, take all the points available in February and March before the final sprint at the beginning of April.
"At that time we will see if we still have a hope of the title or not."
St Etienne took an early lead over Monaco with Blaise Matuidi netting in the 13th minute for 'Les Verts'.
The St Etienne playmaker and skipper seized on a slide rule pass by Dimitri Payet and despite Monaco 'keeper Stephane Ruffier managing to get a hand on the shot it was too powerful to stop going over the line.
The hosts controlled the first-half from that point on - keeping Monaco's in-form Korean star Park Chu-young under wraps after he had made a bright opening while Brazilian Nene was out of sorts.
Instead, it was the duo of Ivory Coast international striker Boubacar Sanogo and Bakary Sako who dominated and were at the heart of what admittedly were rare moments of quality play in the first 45 minutes.
Although the visitors started the second-half in brighter mode St Etienne regained control and it was the impressive Ruffier, who twice came to their rescue first saving a fierce shot from Payet in the 70th minute which he blocked and fortunately for him St Etienne substitute Emmanuel Riviere was unable to turn into the net.
Two minutes later Ruffier pulled off an even finer save as somehow he leapt high to save Argentinian international striker Gonzalo Bergessio's stunning shot which looked certain to be the hosts second.
The 25-year-old three-times capped Argentinian was not to be denied, however, and he doubled St Etienne's lead in the 75th minute as he latched onto Riviere's pass from the left flank and slotted it past Ruffier.
Riviere was to get a deserved reward for his cameo role after replacing Sanogo by adding a third in time added on.
Sunday's other match saw Toulouse show some spirit given the heartbreak they had endured last Wednesday when they lost to Marseille 2-1 after extra-time in the League Cup semi-final, having led until the 85th minute.
However, they dominated a poor Lyon side, who also had Cameroon international midfielder Jean II Makoun sent-off in the 57th minute for a second bookable offence.
Toulouse should have taken all three points but French international striker Andre Pierre Gignac was unlucky not to hit the back of the net - a 20th minute lob grazing the post and then a header from a corner in the 30th minute hit the bar.
