The young Rabbitohs trailed by two points at half time and finished over the top of the Sea Eagles to record their second win of the season.
The Rabbitohs had the Sea Eagles under plenty of pressure in the opening ten minutes of the match, but it was Manly who were first to score in the 12th through front-rower James Mirceski. Clinton Gutherson converted to give the home side a six-nil lead.
The Rabbitohs struck back six minutes later when winger Will Paterson scored from a neat cross field kick. Paterson converted his own try to level the scores at six-all.
Manly scored their second try through their other front rower Jake Trobjevic in the 34th minute, and Gutherson's conversion restored the Sea Eagles' six-point lead.
South Sydney scored their second try in the final minute of the first half with centre Jordan Heyer crossing in the left hand corner to take the score line to 12-10 in favour of Manly-Warringah at half time.
The Rabbitohs started the second half strongly, with five-eighth Jaiden Hawkes pulling off a cracking try saving tackle in the 48th minute, followed by a try to co-captain Cameron McInnes in the 54th minute.
The Rabbitohs had numbers to the left, but McInnes, who was stationed at first receiver, dummied and went himself, carrying three defenders over the line to score. Paterson converted to establish a 16-12 lead with 25 minutes left on the clock.
The Rabbitohs' goal line defence was particularly strong for the next period of play, holding out the Sea Eagles on a number of occasions, whilst managing to mount some pressure of their own at the opposite end of the field.
South Sydney were denied a 90 metre try with less than two minutes to go, and then defended their line galantly to hold out the Sea Eagles and record a nail-biting 16-12 victory.
South Sydney Rabbitohs 16 (Will Paterson, Jordan Heyer, Cameron McInnes tries; Will Paterson 2 goals)
Manly-Warringah Sea Eagles 12 (James Mirceski, jake Trobjevic tries; Clinton Gutherson 2 goals)