Wilfried Bony's late strike was a consolation as the Swans limped out of the Capital One Cup after their Championship opponents ran riot in the second half.
Lee Clark's men grabbed the lead early in the second half thanks to goals from Dan Burn, Matt Green and Tom Adeyemi, much to the delight of the home crowd at St Andrew's after the Premier League opponents had enjoyed the better of the first period.
Wilfried Bony scored in injury time for Michael Laudrup's side, but it was a case of too little, too late for the visitors.
There were 10 changes from the Swansea side that beat Crystal Palace in the Premier League on Sunday, with Jonjo Shelvey the only man to keep his place as summer recruits Alejandro Pozuelo and Bony started.
Birmingham boss Clark, on the other hand, made just five alterations from the team that overcame Sheffield Wednesday 4-1 in the Championship last time out, with Jesse Lingard the most notable absentee. The 20-year-old, who joined on a season-long loan from Manchester United last week, scored all four goals in a win at St Andrew’s on Saturday but cannot play in cup competitions due to a clause in his contract.
Despite the talented youngster’s absence, Birmingham created the first goalscoring opportunity of the game after 13 minutes when Chris Burke fired over the bar from the edge of the area.
However, Swansea almost took the lead just minutes later when Bony hit the bar before Pozuelo also clattered the woodwork with the follow-up.
The Premier League side then began to assert its authority on the game and the Ivory Coast international went close again shortly after, as his powerful shot was blocked in the 30th minute.
Roland Lamah was next to have an effort on goal for Laudrup’s men, but his shot was kept out by the feet of Birmingham keeper Colin Doyle as halftime drew close.
The home side came out the more energized team after the break, though, and it soon created a chance as Matt Green forced Gerhard Tremmel into a great save with five minutes gone.
The pressure soon paid off, and it was Burn who broke the deadlock as the defender netted an unmarked header in the 55th minute.
And things then went from bad to worse for Swansea just minutes later as Green met a cross from Mitch Hancox to leave Tremmel with no chance.
Laudrup then opted to make changes in an attempt to change the flow of the game, with Alvaro Vazquez and Jose Canas replacing Jonathan de Guzman and Shelvey.
But Birmingham was rampant by this point, and increased its advantage when Adeyemi capitalised on a Canas error to claim the third with less than 10 minutes remaining.
Bony then headed home from a Wayne Routledge corner in the dying seconds, but it was no more than a consolation for Laudrup's side as its defence of the cup ended prematurely.