Arbroath moved into third with a comfortable 4-0 victory over Clyde.
Cowdenbeath overcame Montrose 2-0, while Stirling Albion moved up to seventh with a 3-2 win at second-placed Elgin City.
Edinburgh City snatched all three points in their game against Annan thanks to Ryan Porteous' late header.
Forfar went ahead against Berwick when David Cox scored just before the interval with a neat header from six yards out.
Lewis Milne then added a second four minutes from time.
Bobby Linn was on target in the 31st minute for Arbroath; finding the bottom corner with a neat finish.
Martin Scott scored two in two minutes in the second half to clinch victory for the Red Lichties, who leapfrog their visitors in the table, before Ryan McCord added a fourth late on.
Nikolay Todorov fired Cowdenbeath ahead from the penalty spot in the 20th minute after Cammy Ballantyne fouled Kris Renton in the area.
And it went from bad to worse for the visitors when Ballantyne was shown a red card in the 29th minute for a foul on Craig Johnston.
The hosts extended their lead through Renton's 57th-minute header.
Elgin took the lead against Stirling when Darryl McHardy found the bottom corner with a left-footed strike in the 29th minute.
However, the visitors equalised early in the second half when Marc McKenzie headed home at the back post from an Eddie Ferns cross.
Stirling moved ahead when Blair Henderson pounced from close range after Sean Dickson's shot had been saved by the goalkeeper.
Brian Cameron thought he had rescued a point for his side with a 76th-minute strike, but Jamie Mills scored the winner late on.

David West junior, 45, stabbed his father, of the same name, in December 2014 as he lay drunk outside his home.
Handing down the sentence, the judge acknowledged he had been bullied extensively by his father.
But he said the evidence against West was "overwhelming" and his father had been vulnerable when he was killed.
More on this story and news from London
The 70-year-old nightclub owner had made his fortune from the booze cruise trade in Belgium and France in the 1980s before moving into London's West End, buying up lapdancing clubs, restaurants, nightclubs and bars.
However, by the time of the killing, the business was in financial trouble which was the cause of some tension between the two men.
In mitigation, Orlando Pownall QC said West junior had been treated with "severe belittlement and contempt" by his father for 30 years, adding there was "a toxic relationship between father and son."
He told the court that West junior was truly sorry for what he had done, adding: "It was a momentary aberration born of a life experience."
The court was told that the victim's family, including West junior's mother and siblings, as well as the tycoon's business partners had all been against a trial from the start but the Crown had decided it was right to bring the evidence before a jury.
A jury failed to reach a verdict on a murder charge earlier this year and today he pleaded guilty to manslaughter by reason of loss of control.
Sentencing him, Nicholas Hilliard QC, said: "It was clear that you suffered verbal abuse and verbal aggression from your father for many years."

Administrators of the ACT test took the decision just hours before some 5,500 students were due to sit it.
The ACT is one of two entrance exams available to international and domestic students wanting to go to a US college.
This is not the first cheating scandal to hit the tests in East Asia.
The other entrance exam - the SAT - was cancelled in South Korea in 2013 because some of the questions were leaked.
The ACT test was due to be held at 56 test centres in both South Korea and Hong Kong on Saturday morning.
The Associated Press said teachers at some of Seoul's private "cram schools" said they were not notified until about an hour before the students were due to sit the test.
ACT Inc, an Iowa-based non-profit organisation that was operating the test, said it took the decision after receiving "credible evidence that test materials intended for administration in these regions have been compromised".
The organisation said in a statement that all students would get a refund but would only be able to resit when the tests are held again in September.
Forfar Athletic extended their lead at the top of the Scottish League Two table to seven points with a 2-0 win over Berwick Rangers at Station Park.
[NEXT_CONCEPT]
The heir to a string of nightclubs treated as a "whipping boy" by his father has been jailed for 13-and-a-half years for his manslaughter.
[NEXT_CONCEPT]
An examination for students in South Korea and Hong Kong hoping to study at US colleges has been cancelled after "credible evidence" emerged that it had been leaked in advance.