Two goals conceded in the first eight minutes set the tone for the match, and by half-time the home side had opened up a 3-0 advantage.
Rangers faired better after the break and two late goals from Paul Willis and substitute Blair Henderson, saw the visitors fight back to 3-2, but an 88th minute penalty saw the home side take all three points.
The teams had started the day level on 27 points, but Annan have now moved three points clear, although Rangers have a game in hand.
Rangers had gone unbeaten in their first three games of 2015 and had kept a settled side.
But central defender Kerr Young was sent off for two bookable offences against Montrose and this meant a recall for captain Stephen Tulloch, who had missed the previous two months with a broken cheek.
Unfortunately, the defence was cut open twice in the first eight minutes as Annan stormed into an early 2-0 lead.
First of all McColm found the net after only three minutes, shooting high past Billy Bald following a cross from David Hopkirk.
And just five minutes after that the home side doubled their advantage when Josh Todd side-footed in from close range following a cross by McColm.
Lee Currie had a shot blocked as Berwick tried to respond, but Annan looked the livelier side and Martin McNiff pulled a shot wide whilst Matthew Flynn had a shot saved by Bald.
Annan made it 3-0 after 34 minutes when McColm added his second with a low strike past Bald, and such was their plight that the visitors were forced into making their first substitution after only 39 minutes with Ross Gray replacing Scott Maxwell.
Peter Weatherson had a shot saved by Bald as Annan continued to make all the running, whilst Berwick’s only chances of the first half came minutes before the break with Paul Willis and Darren Lavery both having headers saved by Alex Mitchell, whilst Gray shot over from outside the box.
In the second half Todd shot over for Annan whilst Lavery shot wide for Berwick. Lavery also had a shot saved by Mitchell when he was in a one on one position with the keeper and as Rangers tried to get a foothold in the match the striker also pulled another shot wide whilst Gray was also denied by Mitchell.
At the other end Steven Swinglehurst headed over from close range following a free kick and Weatherson headed wide.
But as Rangers started to lose their composure they had four players booked, whilst manager Colin Cameron was also shown a yellow card on the sidelines by referee Colin Steven.
Willis had a shot saved by Mitchell, but a minute later he found the net and pulled a goal back for Rangers after a good run by Dargo.
And in the 86th minute substitute Henderson headed in a second goal for Rangers - his first for the club - from a cross by Gray.
The fightback was helted in the 88th minute however, when Tulloch fouled Rabin Omar in the area and Weatherson converted from the penalty spot.
Annan: Mitchell, Brannan, Watson, Swinglehurst, McNiff, Todd, Flynn, McStay, McColm (Omar 83), Hopkirk, Weatherson.
Berwick: Bald, Jacobs (Henderson 81), Tulloch, Fairbairn, Drummond, Notman, Willis, Currie, Maxwell (Gray 39), Russell (Dargo 46), Lavery.
Bookings: Dargo foul 49; Currie foul 63; Jacobs foul 74; Tulloch foul 88;
Referee: Colin Steven.