Valentin Eysseric scored the only goal of the game in the second half at the Stade Geoffroy-Guichard.
Valentin Eysseric scored the only goal of the game in the second half at the Stade Geoffroy-Guichard as Nice bounced back from a 1-0 defeat at Caen in their last outing before the international break.
It was the perfect response from Lucien Favre's side in a difficult fixture after their closest rivals, Monaco and Paris Saint-Germain, won earlier over the weekend to crank up the pressure on the surprise leaders.
"Overall we deserved the win," said Favre, although he also accepted that his team did not scale the heights that have seen them take French football by storm this season.
"We suffered. We lost the ball in dangerous areas and Saint-Etienne could have scored, so it could have been costly.
"We could have gone 2-0 up but let's not forget that at 0-0, (Nolan) Roux missed a great chance with a header. It would have been very difficult for us to come from behind against such a well-organised team."
Balotelli has scored six goals in six league appearances since moving to France but served a one-game ban here, so there was more of an onus on seven-goal leading marksman Alassane Plea.
He had little impact in a game of few chances but Nice almost went in front when Ricardo Pereira cut the ball back from the right for Jean Michael Seri, whose shot was turned over by Stephane Ruffier in the Saint-Etienne goal.
The hosts responded just after the half-hour mark and the unmarked Roux met a cross by Henri Saivet with his head six yards from goal, only for Yoan Cardinale to save.
Eysseric, who spent last season on loan at Saint-Etienne, then got the breakthrough just after the hour mark.
He got the break of the ball off Loic Perrin on the edge of the box and sent a rising half-volley into the net to silence the home fans.
Nice then held on to move three points clear once again having seen Monaco win 3-0 at Lorient on Friday before defending champions PSG laboured to a 2-0 victory over Nantes on Saturday.
Elsewhere on Sunday, Marseille claimed their first league win under new coach Rudi Garcia at the fourth attempt as a late header from centre-back Rolando secured a 1-0 victory against Caen at the Stade Velodrome.
Marseille remain in the bottom half but are just five points behind fifth-placed Guingamp, who drew 1-1 at home to Bordeaux earlier in the day.