The 18.13 (121) to 14.6 (90) win in front of 32,500 fans was the Bombers' 12th of the season, and will see them safe inside the top four for another week.
But coach James Hird wasn't totally satisfied with the performance after his team let the Bulldogs back into the match, having booted the first six goals.
Behind by 37 points at the 18-minute mark of the first term, the Bulldogs had the better of play for much of the next two-and-a-half quarters.
Dominating clearances and contested possessions, they whittled the lead back to 11 points mid-way through the final quarter, and would have been even closer if not for a disallowed goal to Nathan Hrovat, after the umpire decided not to pay advantage when Tom Liberatore won a free kick for a tackle on Brendon Goddard.
The decision proved critical, as the Bombers steadied and kicked the next three goals to ice the game.
Hrovat said after the game he was surprised by the umpire's call.
"I honestly don't know why it wasn't called advantage," the 19-year-old said.
"I think a lot of players out on the ground, including Essendon players, didn't know.
"But I guess the umpire had his reasons to bring it back."
Hird praised the Bulldogs for their efforts – particularly in contested ball, where they won 165-135 – but maintained his team had deserved its win.
"I still think we were the better team, although the Bulldogs played some really good football," he said.
"It was an outstanding performance by [them] around the ball, giving us a hiding in the contested possessions, and really they were pretty exciting with the ball too.
"It took our defence and midfield time to adjust too, and once we [did] it was probably OK."
Lively half-forward Jason Winderlich was outstanding for the winners, booting a game-high four goals, including a goal of the year contender during the third quarter.
He also had 23 disposals and laid seven tackles to be clearly Essendon's best player.
Veteran Dustin Fletcher's ability to chop off incoming Bulldogs kicks was critical in defence, while Dyson Heppell, Brent Stanton and Brendon Goddard were hard workers through the midfield.
The brave Bulldogs gained great service from young midfielders Hrovat and Tom Liberatore, along with veterans Adam Cooney and Robert Murphy.
In his first game of the season, Jarrad Grant also turned in an encouraging display, finishing with 19 disposals and a goal.
The Bombers' opening quarter blitz included a brilliant yet controversial goal from Jake Melksham.
The 21-year-old appeared to be outside the boundary line when he launched a quick kick from the forward pocket, but the boundary umpire did not call out of bounds and the shot sailed through.
It is the first time the Bombers have won 12 games in a season since 2004, but the victory did not come without a price, with midfielder David Zaharakis subbed from the game after receiving a knee to the back.
However, Hird said he was hopeful Zaharakis would be fit to face Greater Western Sydney next week.
Watson is expected to miss at least another three weeks after having surgery to repair the broken collarbone he suffered against Port Adelaide last week.
Young Bulldog Clay Smith was the major casualty of the hard-fought game, leaving the ground on crutches and with ice on his right knee.
Coach Brendan McCartney said early signs were that Smith had ruptured his anterior cruciate ligament, which would likely rule him out for a year.
WESTERN BULLDOGS 3.2 6.2 12.4 14.6 (90)
ESSENDON 6.4 9.7 13.11 18.13 (121)
GOALS
Western Bulldogs: Dahlhaus 3, Jones 2, Giansiracusa 2, Smith, Grant, Liberatore, Stevens, Tutt, Minson, Goodes
Essendon: Winderlich 4, Dempsey 3, Melksham 2, Heppell 2, Bellchambers 2, Carlisle, Goddard, Ryder, Myers, Stanton
BEST
Western Bulldogs: Liberatore, Hrovat, Cooney, Murphy, Jones
Essendon: Winderlich, Heppell, Fletcher, Goddard, Hibberd, Dempsey
INJURIES
Western Bulldogs: TBC
Essendon: Zaharakis (hip/back)
SUBSTITUTES
Western Bulldogs: Lachie Hunter replaced Mitch Wallis in the third quarter.
Essendon: Nick O'Brien replaced David Zaharakis in the third quarter.
Reports: Nil
Umpires: Burgess, Findlay, Armstrong
Official crowd: 32,500 at Etihad Stadium.
