Atletico lost for just the second time this season in the league earlier on Saturday to open the door, and their city rivals took full advantage at Estadio Jose Zorrilla with a fourth win in a row, the last three of those secured without conceding.
Zinedine Zidane's side failed to register a single shot on target in the first half of a league game for the second time this season and required Thibaut Courtois to produce three big saves to keep them level.
But Madrid, who were without striker Karim Benzema and eight other first-team players, made the breakthrough thanks to Casemiro's 65th-minute header and saw the game out to up the pressure on Atleti, who have a game in hand to play.
Courtois made the first of his key saves inside seven minutes to keep out Fabian Orellana's poked effort and then Saidy Janko's follow-up shot as Valladolid, also denied a strong penalty shout for Casemiro's tackle on Kike Perez, made a bright start.
Casemiro powered a free header over the crossbar from the edge of the six-yard box from Madrid's only clear-cut legitimate opportunity of a lackluster first half, though Mariano did correctly have two goals ruled out for offside.
Lucas Vazquez fired in Madrid's first on-target attempt six minutes into the second period - a simple stop for Jordi Masip to make in the Valladolid goal - after Casemiro had guided another header off target.
The visitors would fallen behind three minutes later if not for Courtois, who saved Orellana's volley and spared the blushes of team-mate Ferland Mendy in the process - the full-back having crossed the ball straight to the opposition player.
However, it proved a case of third time lucky for Casemiro as he headed Toni Kroos' superb set-piece back across goal and away from Masip to open the scoring for the reigning champions.
Valladolid had another penalty appeal rejected, this time for Nacho Fernandez's challenge on Shon Weissman, as Madrid held on for what could yet prove to be a crucial win in the title race.