Sheffield Wednesday finished with ten men as they suffered their first away reverse.
It was a thrilling affair at a Prenton Park with four goals inside the first half-hour but there was plenty of controversy. Wednesday defender Guy Branston was red-carded in the 76th minute on the intervention of the referee's assistant after he appeared to elbow Tranmere substitute Eugene Dadi following a corner.
Tranmere went ahead after 12 minutes with Calvin Zola heading in from a Ryan Taylor cross after good work by Paul Hall.
The Merseysiders doubled their advantage six minutes later with skipper Mike Jackson netting from close range at the far post from a Gareth Roberts corner.
Wednesday pulled a goal back in the 27th minute with Steve MacLean heading his third goal of the season from a Branston flick-on.
But two minutes later Branston brought down Iain Hume inside the box and Durham referee Nigel Miller awarded the penalty. Branston was booked for disputing the award and Taylor send keeper David Lucas the wrong way as he netted into the right corner.
The visitors got back in contention in the 45th minute with Guylain Ndumbu-Nsungu producing an excellent finish from 12 yards from a MacLean pass.
Wednesday threw everything at Tranmere early in the second half when home keeper John Achterberg made a superb reaction save from a Lee Bullen header.
But Tranmere went 4-2 ahead on 64 minutes with Hume netting with a deflected shot after he dispossessed Bullen, who appeared to be pushed off the ball.
A disallowed MacLean goal for Wednesday in the 84th minute put the finishing touch to their misery on the night, as Tranmere went second in the table.