The Uruguayan striker ploughed a lone furrow in attack for the Premier League champions in the absence of the rested Ruud van Nistelrooy but got his reward five minutes from time with the only goal of the game.
Manchester United manager Alex Ferguson said Forlan was now reaping the rewards of an extended run in the side.
"What's helping Diego is playing more often," Ferguson told a news conference. "He's establishing himself and with the form he's showing it's hard to leave him out."
The match had looked destined for a scoreless draw with both sides packing midfield and neither goalkeeper making a save in the first half.
Ferguson admitted that his team, featuring five changes from the team that beat Blackburn on Saturday, were "not great" but saluted their professionalism.
"We didn't make any big mistakes," he said. "Without the major mistakes Panathinaikos didn't get any encouragement that would have inspired them."
The Scot opted for a central midfielder trio of Kleberson, Darren Fletcher and Nicky Butt, supported by two wide men -- Ryan Giggs and Cristiano Ronaldo.
The young Portuguese winger tormented Panathinaikos' German left back Markus Munch into getting booked but found no team mates to profit from a stream of testing crosses.
The visitors gave a start to Scotland international Fletcher and Ferguson said it was important to test his fledglings in away games in Europe.
"I like to see how the young players perform away from home, it's a great experience for them," he said.
Goalkeeper Tim Howard was a spectator for much of the evening with a solitary shot from Munch the only threat from the hosts.
United lifted the pace for a 20-minute spell midway through the second half to carve out chances for Giggs and Forlan, who wasted the best with a low shot just past the post.
Ferguson denied resting the Neville brothers and Van Nistelrooy, insisting their presence on the bench was a precaution after minor injuries in training, but said it was now important to top the group.
"Irrespective of the result tonight we knew it would go down to the last game at home to Stuttgart," he said. "Psychologically it's always better to win the group."
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