Dunphy, who coached the Quakers for 17 seasons, improved to 3-1 against Penn since making the move across town for Temple in 2006. Dunphy led the Quakers to nine NCAA tournaments and has the Owls (14-3) in position for their third straight trip.
In front of Oscar-winning actor Denzel Washington, the Quakers (1-11) stubbornly stuck with the Owls and used a second-half run that cut the deficit to five and make another famous Philly upset at the historic Palestra seem possible.
The Owls never let them get closer and held on for their 10th win in 11 games.
Dunphy is always emotional when he returns to the sidelines he roamed for 17 seasons. This one was special because he coached against one of his former star players, interim Penn coach Jerome Allen.
Allen and Dunphy shared some laughs during a pregame chat about an hour before the city rivals tipped off. Allen was a two-time Ivy League player of the year (1993, 1994) under Dunphy and scored 1,518 points for the Quakers. He started this season as an assistant coach, but was promoted in December when Glen Miller was fired after an 0-7 start.
Penn lost its first three games under Allen, including road losses at Duke and Davidson, before beating Maryland-Baltimore County last week.
Penn's latest loss attracted some heavy hitters. Washington, wearing a gray Penn T-shirt and dark cap, took his bleacher seat behind press row. He had a halftime conversation with Gov. Ed Rendell, who earned his undergraduate degree at Penn in 1965. Once a fixture, Rendell had been a no-show at games this year as the program plummeted once Dunphy left.
One of Washington's film roles was the subject of a Temple student section banner: "Not Even John Q Could Save Your Team." Allen in his prime and Dunphy's return are about all that could save the Quakers this season.
Washington has become a Quakers fan because his son, freshman guard Malcolm Washington, is on the team.
The 5-foot-9 Washington had his shot rejected late in the first half by 6-9, 225-pound Lavoy Allen and the Quakers went into the break down 33-24.
The Quakers did not attempt a single free throw in the first half. Jack Eggleston led Penn with 14 points.
Justin Reilly's only two baskets for the Quakers were big ones midway through the second. He hit a 12-foot jumper and a 3-pointer during the 10-0 run that brought Penn to 45-40.
The Owls mixed the ball around and used a series of layups and free throws to slowly pull away. Dunphy yelled "No shots! No shots!" while the Owls held the ball in the final minute. Temple even took a shot-clock violation.
He shared a handshake and hug with Allen after the Quakers lost their first home game in 36 days.
Temple assistant coach Matt Langel, a former Quaker, left at halftime because his wife went into labor.