The rampant hosts stormed to victory thanks to three first half strikes against Huub Stevens' men, who were lackluster throughout the encounter
Borussia Dortmund and Bayern Munich's victories earlier in the day made victory for these two teams essential and it was the hosts who emerged as victors with goals from Marco Reus, Mike Hanke and Juan Arango.
Lucien Favre's men required extra time to defeat Hertha Berlin in a DFB-Pokal clash on Wednesday, but wasted no time in taking the lead today.
A matter of seconds were on the clock when Patrick Herrmann crossed the ball from the right towards Reus, who brilliantly turned Benedikt Howedes before firing past Lars Unnerstall.
Schalke was shellshocked by the goal and was in constant danger of falling further behind. Arango crossed the ball towards Reus, and although the vistors' backline eventually dealt with the danger, Unnerstall and Kyriakos Papadopoulos initially made a hash of dealing with the with the Venezuelan's cross.
An unmarked Dante sent a header wide before Hanke finally put doubled his side's advantage. The 28-year-old collected the ball on the left, exchanged one-twos with Herrmann and Arango before curling the ball into the far corner.
Hanke missed a chance to grab a third goal, heading Herrmann's ball across the face of goal, but it was to matter little as the hosts soon motored into a 3-0 lead, with Arango curling a free kick over a wrong-footed Unnerstall and into the top corner.
At the other end, Schalke offered very little. Havard Nordveit easily cut out a Jefferson Farfan cross, Jose Manuel Jurado sent an optimistic effort high and wide, while Chinedu Obasi picked up a booking for a transparent attempt to buy a penalty off Tony Jantschke.
Gladbach almost topped a near-perfect half with a fourth strike, with Hanke nicking the ball past Unnerstall, but, off-balance, was unable to produce an accurate strike.
Huub Stevens withdrew Jurado at halftime in favour of Christoph Metzelder in an effort to shore up the Schalke defense, and although Monchengladbach failed to replicate the first half performance after the break, it had opportunites to score nonetheless.
An uncharacteristically poor pass from Arango allowed Unnerstall to beat Reus to the ball, before an offside Roman Neustadter sent an easy chance live after being set up by a deft touch from Reus.
An optimistic long-range effort from Reus was spilled by Unnerstall, but luckily for the visitors, no Gladbach players reacted quickly enough to put the loose ball in the net.
A trademark break from the hosts resulted in Igor De Camargo sending in a cross that an unmarked Juan Arango could not reach.
Schalke maintained possession well in the middle of the park throughout the second half, but was unable to produce any sort of service for the likes of Raul and Klaas-Jan Huntelaar, who were always under close scrutiny from the Gladbach back line.
In the end, however, three goals was enough for the hosts, who moved above their adversary into third place, just three points behind Borussia Dortmund. Schalke sits five points behind its local rival.