The winger sent a curling shot inside visiting goalkeeper Adriano Basso's near post in the ninth minute, to secure the three points.
The scoreline was not a fair reflection on an entertaining clash in which both sides carved out numerous opportunities with some impressive football.
Forest had been left with a point to prove, following a 4-0 defeat in their last home outing, at the hands of Scunthorpe.
But they were deserving of a victory that firmly re-established their promotion credentials and their lead at the top of the table.
City's teenage striker Jennison Myrie-Williams provided the first moments of danger, firstly with a darting run into the box that culminated in a cross that Paul Smith had to handle well and, moments later as he guided a decent opportunity wide of the post.
Forest midfielder James Perch struck a shot over, as he attempted to add to his record of having scored in his last two matches against the Robins.
City hit back with a corner, but Forest broke quickly through Kris Commons, who carried the ball the length of the pitch before being hauled down by Louis Carey just outside the box.
It looked as though Commons would strike the resulting free-kick, but he stepped over the ball and allowed Southall to strike a crisp, curling shot that seemed to take a slight deflection off the Bristol wall, as it beat keeper Basso inside his near post.
Neil Harris came close to making it 2-0, as he headed a Commons free-kick just wide of the post, as Forest continued to pressure.
Smith had to make a fine save at the other end as Lee Johnson connected with a fierce drive from just inside the box, forcing the keeper to plunge acrobatically to his left to palm away.
City's Basso was also kept busy, this time as Harris connected with a fine cross from Commons, only to direct his header right at the keeper.
Scott Brown looped a header just over the bar, as Forest held out under a short spell of City pressure.
But the home side finished the first half with a flourish as Sammy Clingan forced Craig Woodman to make a desperate headed clearance off the line, with a dipping shot, before Junior Agogo enticed another strong save from Basso, with an angled shot following a speedy break from his own half.
Wes Morgan carved out a chance early in the second half, as he pushed forward down the right and crossed for Commons to hit a poor shot with his weaker right foot, which failed to trouble Basso.
The end-to-end nature of the game continued, with Phil Jevons hammering a free-kick goalwards for Smith to palm over impressively.
But Forest survived a late onslaught to claim three important points.