The Town's unbeaten record came crashing to end Bootham Crescent.
Three first half goals put Gary Mills' side on their way to victory with two from Ashley Chambers and one - inevitably - by former Hatter Jason Walker.
Walker hit the crossbar in a low-key second but as Gary Brabin's men fell to their first defeat in the Blue Square Bet Premier.
Brabin made two changes to the side that drew at Bath in the week. Keith Keane returned after missing the previous games with a hip injury and Robbie Willmott was reinstated to the starting XI. Amari Morgan-Smith missed out through suspension after picking up his fifth booking of the season whilst Danny Crow dropped to the bench.
The Town started the opening minutes the brighter of the sides - a seventh minute cross from James Dance almost found the head of Stuart Fleetwood but Michael Ingham in the home goal was alert to the danger.
But after that half chance the Hatters found themselves a goal down on 10 minutes. An Ingham kick down field was nodded on by Jason Walker before the ball was quickly shifted to Chambers on the edge of the box on the right flank and the home number 10 looked a curled a shot beyond the dive of Mark Tyler.
It was all the Minstermen and it could have been 2-0 three minutes later when Jamie Reed sent a looping side-foot shot inches wide of the post after beating Will Antwi to the ball.
Reed could and really should have made the Town pain 60 seconds later when he raced through and free beyond Antwi and Janos Kovacs but after having all the time in the world to pick his spot he could only shoot straight at the legs of Mark Tyler.
Just when it looked as though the Town were getting back into things - a speedy run from Robbie Willmott down the left almost fashioned a chance for Fleetwood following Alex Lawless's cross - York doubled their lead just after the half-hour mark.
And there were no surprises as to who got the goal - Reed battled past Howells down the Town's left to pick out Walker who swept a low shot past Tyler for his eighth in York colours since joining from Kenilworth Road in the summer.
The Hatters were really struggling to impose themselves in the home half but they almost got back in it on 38 minutes when Howells engineered an opening for Fleetwood on the edge of the box and the striker sent a curling shot inches the wrong side of the post.
2-0 down heading towards half-time was no disaster with another 45 minutes ahead of them but then disaster struck the second minute of injury time as York made the Town pay for more slack defending to make it three before the break. Walker turned creator this time to lift a cross from the left bye-line to Chambers who made no mistake to volley past Tyler from close range for his second of the afternoon.
John Paul Kissock signalled to the bench with an injury and he was replaced by Aaron O'Connor
and Brabin made a second change at the start of the second half with Adam Watkins replacing Lawless - the ex-City man had picked up a booking in the first half.
But the hosts started the second well - almost 40 seconds in Chambers sent a low shot wide of Tyler's right-hand post as he looked to take a matchball home.
However, the Town looked a little brighter, with Keane in central midfield and the number four almost got a chance to reduce arrears on 49 minutes when swapping passes with Fleetwood. From the half-cleared corner O'Connor fed Fleetwood who squared for Jamie Hand but the on-loan midfielder could only scoop a shot way over the crossbar from six yards.
Walker almost made the Hatters pay for that miss on 54 minutes when he left the woodwork shaking after a terrific shot from 25 yards.
After that effort it wasn't until the 67th-minute that either side fashioned a chance of note and two fell to the Town with Howells firstly calling Ingham into action to tip a shot around the post before Kovacs headed the resultant corner into the hands of the home stopper.
York raced up the other end and almost notched his second when Chambers' clever ball into the near post saw the striker fire over from yards.
Four minutes later on 72 minutes, Willmott fizzed a free-kick narrowly over the crossbar after O'Connor was fouled 25 yards out.
York were still threatening a fourth goal with Walker at the heart of things. A neat move down the right saw Antwi concede a corner from which the ball was worked to Jon Challinor on the edge of the box and he drove a shot over Tyler's crossbar.
But that was the last action and the Hatters were left to rue a poor first half showing.
Two home games now come, starting with the visit of Cambridge on Tuesday night. They say it's all about reactions after a defeat...make sure you get down to Kenilworth Road and back the boys.
For minute-by-minute analysis see below.
Result from Bootham Crescent
York City&nbsp;3 (Chambers 10, 45, Walker 31)
Luton Town 0
FULL-TIME It's all over here at Bootham Crescent, pictures, a full report and reaction to follow.
90 mins + 3 - Keane shot from 20 yards, held by Ingham.
90 mins - Four added minutes at the end...
90 mins - Into the last minute, final sub for York, Liam Henderson replacing Walker.
85 mins - Work for Ingham as he dives to his left to keep out Hand's shot on the volley from 25 yards.
81 mins - Chance for four, Challinor - the right-back, sends a shot over the bar. By the way 606 Town fans are in the crowd of 3,570.
80 mins Third and final sub for the Town as Danny Crow replaces Fleetwood.
76 mins - Another change for York, Chambers, who's looked very dangerous this afternoon, is replaced by Matty Blair.
72 mins - Half a chance for the Town from a set-play as Willmott sends a free-kick from 25 yards over Ingham's crossbar.
68 mins - Almost a sniff for 4-0 as the two goalscorers combine. Chambers playing an intelligent ball into the near post to Walker to shoot over from six yards.
67 mins - Chances for the Town inside 60 seconds as firstly Howells runs through unchallenged in the box to drive a shot goalwards that is tipped around the post before Kovacs heads straight at the keeper from the resultant corner.
66 mins - First change of the day for the hosts as Adriano Moke replaces Reed.
60 mins - Town fans in good voice despite being 3-0 behind.
54 mins - Almost an absolute corker of a goal for Walker. With nothing on the former Town striker looks up 25 yards out and bends a shot goalwards that beats Tyler but leaves the crossbar trembling. A great effort.
49 mins - Better from the Hatters and they should pull one back. Keane bursts into the area and sees a shot blocked for a corner which York half-clear. O'Connor retrives and finds Fleetwood who squares for Hand put the midfielder, off balance, scoops a shot, way way over.
48 mins - Town now have Keane in centre-midfield, Dance at right back and O'Connor on the right wing.
46 mins - Almost a fourth for York 40-odd seconds in the second half, Chambers - on a hat-trick - sending a low shot just wide.
46 mins We're off again here at Bootham Crescent, Adam Watkins has replaced Lawless.
HALF-TIME I'm not sure the Hatters have had a worse 45 minutes in the Blue Square Bet Premier. They find themselves three goals behind at the break. Check back in 15 minutes to see if they can somehow - somehow - recover from this.
45 mins + 3 Aaron O'Connor
on for Kissock.
45 mins + 2 &nbsp;YORK 3-0 Town (Chambers) Disaster for Town. Walker scampers down the left and stands up a cross into the six yard box and ASHLEY CHAMBERS is on hand to expertly guide the ball past Tyler with a volley on the spot.
45 mins - Into the last minute this half.
38 mins - And then the Hatters are almost back in it. Howells doing really well down the left to find Fleetwood on the edge of the box who looks up and curl a shot that looks destined to find the net, only to drift agonisingly wide. That wasn't far away, as the gasps in the home crowd indicate.
38 mins - Seven minutes to the break, the Town need solutions and quick. Brabin and Neilson discuss in the technical area. The unbeaten record looks like being ended today unless things change...
31 mins &nbsp;YORK 2-0 Town (Walker) - Who else was thinking that this would happen? Just when the Town looked to be getting the hang of things Reed battles past Howells down the right to square to JASON WALKER who finds the back of the net with an instant cool finish.
28 mins - Shot off target from the Town, slowly finding their feet again, Fleetwood chances his arm, shooting over from 20 yards.
27 mins - Should be 1-1. Tyler does well to claim and then throw the ball to Willmott who does brilliantly to motor down the left. He takes a bad touch but the ball bounces into the path of Lawless who glides into the area and stands up a cross looking for Fleetwood at the back post but the pass is over-cooked.
23 mins - Half, well not really half, a sniff for the Town as Fleetwood win a free-kick that Howells curls into the box but Kovacs can't get a decent connection on his header which drifts wide.
20 mins - Still all York at the moment, the Hatters are struggling to get out of their own half at the minute.
14 mins - York are threatening to run riot here, and the Town have Tyler to thank for keeping the score at 1-0 as he saves Reed shot after he'd raced through onside.&nbsp;Should be 2-0 or 3-0 already..but it's not...
13 mins - Almost 2-0 and the hosts are absolutely flying. Jamie Reed beats Antwi and then wins a header not knowing where the ball drops. Eventually the York man is the first to it but dinks the ball wide of the target.
10 mins &nbsp;GOAL! YORK 1-0 Town (Chambers) - York have slowly been building something in the last few minutes and they've made their pressure count. Ingham punts the ball upfield and Walker heads the ball on. The ball is squared out to ASHLEY CHAMBERS on the right who cuts inside Howells on the edge of the box and sends a lovely curling shot beyond the dive of Tyler.
7 mins - Almost a chance for the Town to take the lead as Dance sends in a great cross from the right that skims over the head of Fleetwood and Ingham has to get down to keep the ball from going in the net.
5 mins - First foray forward by York but James Meredith is up against Keane and there's only one winner - the captain putting in an excellent tackle. Keano, Keano, rings out from the away end.
2 mins - As expected it's 4-3-3 for the Town with Tyler in goal, Keane - the skipper - at right-back, Howells at left-back, Antwi and Kovacs centre half, Kissock, Hand and Lawless in a midfield three, Willmott on the left, Dance on the right and Fleetwood up top.
1 min Annnnnnnnnnd we're off as the Town get us off and underway. Come on you Hatters!
14:56 HERE THEY COME
Two sides out on the pitch, standby for coin toss, handshakes and photographs. Enjoy the updates COYH.
14:54 FOLLOW, FOLLOW
Plenty of Town fans here this afternoon, we're expecting approximately 500 to make the journey north today.
White shirts and orange shorts for the Hatters today by the way.
14:44 PRESS BOX PREDICTIONS
Andrew Barringer: 2-1 Luton, Simon Pitts: 1-1, Bill Cole: 2-2, Mike Simmonds: 2-2, Ian Ryan: 2-2, Euan Duncan: 1-1, Mark Wood: 2-1 Luton.
14:30 THE TEAMS
York: Ingham, Meredith, McGurk, Reed, Kerr, Walker, Chambers, Boucaud, Fyfield, Challinor, McLaughlin. Subs: Smith, Parslow, Henderson, Blair, Moke.
Town: Tyler; Keane, Antwi, Kovacs, Howells; Kissock, Lawless, Hand, Willmott, Dance, Fleetwood. Subs: Crow, O'Connor, Asafu-Adjaye, Watkins, K. Pilkington.
14:20 TWO CHANGES
Keith Keane and Robbie Willmott start for the Town.
14:11 HANDSHAKES AND SMILES
Jason Walker gets hugs and handshakes from a number of the Town players as he comes out to warm up.
14:10 KEANO, THERE'S ONLY ONE...
The Town number four, who has missed the last two games, is out on the pitch warming up, as is Ed Asafu-Adjaye. Team news coming soon.
13:45 THE BOYS ARE BACK IN TOWN
Gary Brabin and the Town players take to the Bootham Crescent in their tracksuits soaking in the pre-match atmosphere. Keith Keane is amongst those players. Team news in the next 30 minutes.
12:00 SATURDAY! SATURDAY!
Hard to believe it's almost October but today, 24th September, will be the first time this season the Town play away from home on&nbsp;a Saturday. Tuesday night trips to Mansfield, Hayes &amp; Yeading, Telford and Bath and a Friday night journey to Stockport have made up the Hatters' away games this term.
It's also the Town's first Saturday 3pm start at York since 2001/02 when an Ian Hillier thunderbolt ensured a 2-1 victory in a game best remembered for Steve Howard missing from the penalty spot.
The last three visits to Bootham Crescent - all in the Conference - have seen one goalless draw and two 1-0 victories for York.
10:00 TOUGH TEST
Ten games into this season's Blue Square Bet Premier campaign and the Town are unbeaten and top of the league. At this early stage of the season it doesn't get much better.
In the build-up to the previous 10 games boss Gary Brabin has warned of the oppositions' threat. "A tough test" he would say.
And he's quite right. We all know that being Luton Town has its own pressures. No matter who you face it aint gonna be easy.
This afternoon, however, the manager's assessment of this afternoon's opponents, York City, are really on the money.
Gary Mills's side are one of the sides predicted to be up there with the Hatters come April when the season reaches its climax. Today will definitely be tough.
It's been a case of so far, so good for the Town - unbeaten in 10 games and at the summit of the league (okay so three other teams are also on 20 points - but let's not worry about for the time being), 10 games successively negotiated without defeat.
A fortnight ago the Hatters were six points off the top of the table, seemingly playing catch up with the likes of Wrexham and Gateshead.
Now Brabin and co. head to Bootham Crescent leading the pack. It's a good job to get there and it's an even tougher job to stay there.
That's the aim today. 10 down and 36 to go. It's not going to be easy but, in case you didn't realise, rarely are things a walk in the park when it concerns Luton Town...&nbsp;
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