Graham Westley's Stevenage are now eight points clear of Oxford
Scott Laird's second-half penalty gave Stevenage's promotion hopes a huge boost by taking them eight points clear of title rivals Oxford United.
Laird stroked home left-footed from the spot after David Bridges was brought down by Jake Wright.
Borough had the better of the first half and saw Tim Sills head Ronnie Henry's free-kick against the bar.
Chris Beardsley was denied a second by Ryan Clarke, while Simon Clist and Sam Deering went close to an equaliser.
But Oxford's failure to take anything from the game means they have now won just one of their last seven Blue Square Premier games, handing the initiative in the title race to Stevenage.
And it has also allowed Luton to leapfrog the long-time leaders into second place, five points behind Stevenage who they meet at Broadhall Way on Saturday.
Borough had by far the better of the first half, Mitchell Cole firing narrowly wide early on.
Sills forced a smart save out of Clarke and then hit the woodwork after Michael Bostwick fired wide.
Deering had Oxford's best first-half effort but his shot from 25 yards was saved by Chris Day.
Stevenage finally broke the deadlock minutes after the restart when Bridges was fouled in the box, setting up Laird to net the winner.
Clarke kept Oxford in it when he tipped Beardsley's shot around the post.
And although Oxford improved after falling behind they could not find an equaliser, leaving their own title hopes on a knife edge.
Day tipped Clist's free-kick over the bar, while Matthew Green and Deering both failed to hit the target.
Stevenage manager Graham Westley said: "No-one is going to play down the significance of beating another contender, because obviously it makes a big difference to the league table, but it is still just another three points and we still have a lot to do.
"I thought it was an authoritative performance.
"We were nice and solid, we dictated play, and we were probably unfortunate not to go in ahead at half-time. But we came out for the second half with a real sense of purpose."
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