The capital-based club had never won seven consecutive competitive matches without conceding until Saturday, as the attackers' goals sent them top of the table
Cristiano Ronaldo struck his 14th league goal in his last 10 appearances just before the hour and Karim Benzema made sure with 15 minutes remaining.
Thed victory opens up a two point-gap over rivals Barcelona and Atletico Madrid, who have a game in hand, at the top of La Liga.
The hosts struggled to find a way past Ricardo in the Granada goal in the first half with Ronaldo, Sergio Ramos and Benzema all wasting good openings.
Ronaldo's 22nd league goal of the season broke the deadlock after the break, much to the relief of the crowd, with Benzema converting from a Marcelo pass to seal the points, although the victory was overshadowed by an injury to Gareth Bale that saw him substituted at half-time.
Granada failed to force a save out of Diego Lopez and their two-game unbeaten run comes to an end, with Lucas Alcaraz's side remaining in 10th place.
Carlo Ancelotti named the same side for a third consecutive league fixture, with Angel Di Maria starting ahead of Isco, while the visitors made a single change as Mohammed Fatau replaced Fran Rico in midfield.
Ronaldo had the first opportunity for Madrid in the sixth minute, the Portugal international making something out of nothing as he cut in from the left but skewed his shot wide after beating two defenders.
Ramos went even closer five minutes later as the defender rose to meet a Bale delivery, but the centre-back headed over from close range.
Granada were doing a good job of restricting their opponents and Madrid had to rely on set pieces to threaten.
The hosts had the ball in the back of the next just before the half-hour mark as Benzema turned in a knock-down from Ramos, but the French striker was flagged offside and the goal was ruled out.
Ronaldo was denied on the stroke of half-time as his overhead kick from seven yards was brilliantly kept out by Ricardo.
Luka Modric and Benzema both wasted chances early in the second half, but in the 56th minute Ronaldo finally broke the deadlock.
The forward receiving a pass from Modric inside the penalty area, he was allowed to turn and fired low beyond Ricardo to relieve the pressure inside the Santiago Bernabeu.
And, after Ronaldo had seen a free kick hit the crossbar, Madrid doubled their lead in the 75th minute, Marcelo squaring a pass to Benzema to turn home from close range.