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The Knights had the better of the opening stages with a try to Keith Lulia in the ninth minute.
The Eels struck back through Joel Reddy in the 18th minute and looked to be growing in confidence against their more fancied rivals.
Newcastle centre Junior Sau scored a well worked try in the 29th minute to put the home side back in front.
At half time, the Knights held a less than convincing 12-6 lead.
News of an injury to Knights playmaker Scott Dureau raised the Eels stocks. Dureau reportedly suffered a groin injury in the first half and could be out for up to six weeks.
Parramatta lifted after the break and were rewarded midway through the second half with a try to halfback Jeff Robson.
At 12-all, and with a little over 10 minutes to go, Knights five-eighth Jarrod Mullen attempted to break the deadlock with an unsuccessful field goal attempt.
Two minutes later, Parramatta hit the front for the first time with a penalty goal, and backed it up with a try to prop Fuifui MoiMoi to make it 20-12 in favour of the visitors.
The Knights set up a grandstand finish with a try to Mullen, making it a two point ball game with four minutes left on the clock.
The Eels were able to hang on to upset the locals and post a much needed win.
Match Details Parramatta Eels 20 def Newcastle Knights 18 Round 13 - Sunday June 7th, 2009 03:00pm Venue: Energy Australia Stadium Referee: Gavin Badger & Brett Suttor Sideline Officials: Daniel Eastwood & Jeff Younis Video Referee: Bill Harrigan Crowd: 18,085 Halftime: Knights 12-6
Newcastle Knights 18 Tries: Keith Lulia, Junior Sau, Jarrod Mullen Field Goals: Jarrod Mullen (0/1) Goals: Kurt Gidley (2/2), George Ndaira (1/1) Parramatta Eels 20 Tries: Joel Reddy, Jeff Robson, Fuifui Moimoi Goals: Luke Burt (4/4)
LeagueUnlimited.com Live Commentary Talk about the game as it happens - Knights v Eels forum discussion - click here!
KNIGHTS: 1. Kurt Gidley (c) 2. James McManus 3. Junior Sau 4. Wes Naiqama 5. Akulia Uate 6. Jarrod Mullen 7. Scott Dureau 8. Mark Taufua 9. Isaac DeGois 10. Danny Wicks 11. Steve Simpson 12. Zeb Taia 13. Chris Houston Interchange: 14. George Ndaira 15. Matt Hilder 16. Richie Fa