Ngannou, who was making his professional boxing debut, landed a left hook which dropped Fury on the canvas in round three.
But Fury, whose WBC heavyweight belt was not on the line, rallied back to overcome the 37-year-old Cameroonian.
One judge scored it 95-94 in favour of Ngannou, two gave it to Fury at 96-93 and 95-94.
Fury won the commemorative Riyadh champion belt and extended his unbeaten record to 35 winning 34 and drawing one.
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His victory means a blockbuster bout with fellow heavyweight champion Oleksandr Usyk, who holds the WBA, WBO and IBF titles, which has been signed, remains on the horizon.
Speaking after emerging victorious, Fury told TNT Sports: That definitely wasnt in the script, I got caught round the back of the head [for the knockdown]. I wasnt hurt. I got up and got back to my boxing.
Hes an awkward man and a good puncher and I respect him a lot. Hes given me one of my toughest fights of the last 10 years.
On his part, Ngannou blamed his defeat on an injury he sustained going into the fight.
My training camp was only three and a half months and I came into this with an injury.
But I dont want to give excuses. I will look at what I can do next to improve my game to come back even better.
Now I know I can do this, get ready. The wolf is in the house.
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