Tyrone's superior finishing was the difference between the sides in a thriller at Fontenoy Park.
South Down opened well but Tyrone struck for vital goals from Conor Grogan and Rory O'Neill, but the sides were level at 2-8 each at half-time.
Aidan Kelly struck for Tyrone's third goal midway through the second half and with Cathal McErlean in brilliant form from frees, they led by 3-12 to 2-9. They held on despite having Damien Maguire sent off for a second yellow and conceding a goal to Liam Morgan.
MAN of the match -- Cathal McErlean (Tyrone).
SCORERS -- Tyrone: C McErlean 0-8 (5f), A Kelly 1-2 (1f), C Grogan 1-1 (1f), Rory O'Neill 1-0, J Kelly 0-2, S McLoughnery, P Begley 0-1 each. South Down: L Morgan 1-4 (1-2f), E Donnelly, M Magee 1-1 each, M Cunningham 0-4, P McAleenan 0-1.
Tyrone -- N Gallagher 7; Ryan O'Neill 6, D Maguire 7, J Patton 7 S P Begley 8, M Grogan 8, M Winters 7; A Kelly 8, T Hughes 6; C McErlean 9, J Kelly 8, S McKiver 6; C Grogan 7, B Winters 6, Rory O'Neill 7. Subs: S McLoughnery 6 for C Grogan (58), M O'Gorman 6 for S McKiver (58), M Quigg 6 for B Winters (60).
South Down -- G McMullan 8; C Teague, 6 J McGrath7, P Byrne6; K Fegan 5, M McCartan 7, C Earley 5; N Burns 6, P McAleenan 7; E Donnelly 6, M Cunningham 8, L Morgan 8; A Brown 5, E McGuinness 6, M Magee 7. Subs: A McGuinness 5 for K Fegan (ht), L Deegan 7 for C Earley (h-t), B Morgan 5 for E Donnelly (45), I Galway 6 for A Brown (51), A Gough 5 for N Burns (55).
ReF -- G Duffy (Antrim).