Andrew Gale's men slipped to their seventh loss in 13 games to weaken their position in the North Division, with only three matches left to save their campaign.
Yorkshire will need to win at least two of those games – and probably all three – to preserve their chances of reaching the knockout stage.
They play Warwickshire at Edgbaston on Wednesday before rounding off with fixtures next weekend at Nottinghamshire and Derbyshire.
This was an entertaining contest between the Roses rivals in front of a packed and partisan Manchester crowd.
Yorkshire totalled 162-8 after winning the toss, Herschelle Gibbs leading the way with 51 and Adam Lyth contributing a perky 36.
But the visitors' score looked 10 to 15 runs short and Lancashire kept their nerve in murky conditions.
Stephen Moore cracked a 24-ball half-century and Paul Horton and Steven Croft made useful 30s as Lancashire prevailed with six balls to spare.
Fresh from helping England Lions to victory in their triangular series against India and West Indies, Gale departed early in the piece.
The captain miscued a lofted drive off Sajid Mahmood's first ball and was superbly caught by Simon Kerrigan running back from deep mid-on as Yorkshire slipped to 21-1 in the fourth over.
Lyth, four days after becoming the first man to reach 1,000 first-class runs in England this summer, relieved the pressure with successive fours off medium-pacer Tom Smith.
The left-hander rocked back on his heels to give himself room to strike Smith to the cover boundary and then pulled him viciously towards the Yorkshire dug-out situated to the right of the red-bricked pavilion.
In front of 13,500 spectators, a handful of whom blew those wretched vuvuzelas (it was only a matter time before they infiltrated Twenty20), Lyth then produced one of the shots of the night when he struck Mahmood for six over mid-wicket towards Old Trafford railway station.
Yorkshire scored 58 in the first six overs of power play and had constructed a solid platform when Lyth was second out on 71, caught by Nathan McCullum at mid-wicket off left-arm spinner Stephen Parry after facing 22 balls.
Parry, another who impressed for England Lions, was the pick of the Lancashire attack with 3-14 on a pitch that offered pace and bounce.
Parry claimed the third and fourth wickets when he had Jacques Rudolph well held at mid-wicket and Gibbs caught at long-off, the latter having ticked along nicely without ever reaching his blistering best.
Boundaries proved hard to come by throughout the innings, Yorkshire managing only 16 on a surface that afforded a well-balanced contest between bat and ball.
Anthony McGrath was another who perished trying to clear the straight fielders when he was caught by Mahmood at long-on off Kerrigan to leave Yorkshire 139-5 in the 17th over.
Lancashire took three wickets in the final over to wreck Yorkshire's hopes of a grandstand finish.
The agile McCullum took his third great catch of the night when he flung himself forward at deep mid-wicket after Jonny Bairstow top-edged a pull off Mahmood.
Adil Rashid pulled Mahmood to mid-on before Clint McKay was run-out by the bowler as Yorkshire's innings died with a whimper.
McKay, back in the side after representing Australia in the NatWest one-day series, conceded only four runs from the opening over of Lancashire's reply to briefly silence the infernal vuvuzelas.
But the second over from Steve Patterson disappeared for 14 – much to the delight of a beer-fuelled crowd.
That crowd grew even more raucous when Richard Pyrah, who replaced Patterson at the Brian Statham End, served up three successive short deliveries that were bludgeoned to the fence by Moore.
Pyrah hit back by forcing Smith to clip tamely to mid-wicket but Moore motored on in dynamic fashion, scoring 50 of the first 65 runs.
After managing three more runs than Yorkshire in the power play overs, Lancashire lost their second wicket on 84 when Moore was outwitted by Pyrah and spooned apologetically to cover.
In increasingly gloomy light more evocative of late September than early July, the game continued in nip-and-tuck vein as Croft was brilliantly caught by Rudolph at deep mid-on off Rashid.
When McCullum and Gareth Cross went in quick succession, leaving Lancashire 146-5 in the 18th over, Yorkshire sensed an unlikely win.
But Horton killed their hopes by striking successive boundaries off McKay before Lancashire accrued the last nine runs in the penultimate over bowled by Patterson.
Display of the day
n Put the skids under Yorkshire's innings with 3-14 from four overs.