Los Blancos were at their very best as they saw off Mauricio Pochettino's men at home with the Brazilian playmaker pulling all the strings for the league leader.
The league leader grabbed the first goal of the game on 23 minutes when Cristiano Ronaldo finished off a clever move before Sami Khedira doubled Madrid's goal tally before the break.
Just after the interval Higuain struck from close range before Kaka scored a deserved goal. Higuain put the icing on the cake with 12 minutes to go for the home side, which appears odds on to win their first Liga title since 2008.
Madrid made a dominant start to a proceedings and it was a surprise that it took until the 23rd minute for the home team to open the scoring. After some sloppy defensive play by Raul Rodriguez, the center back gave the ball away to Mesut Ozil who played a quick pass into the feet of Gonzalo Higuain who flicked it into the feet of Cristiano Ronaldo to sweep home with his left foot from 12 yards out - his 30th Liga goal of the current campaign.
Los Blancos doubled their lead in the 38th minute as Sami Khedira grabbed his first league goal for Mourinho's men since his arrival at the club in the summer of 2010. The German midfielder played the ball to Ronaldo who found Ozil with the playmaker picking out his compatriot in the area who had continued his run. The former Stuttgart man showed great composure to place the ball into the bottom corner past the despairing Kiko Casilla.
The home side could have doubled their lead in first-half stoppage time as first of all Higuain's effort from close range was blocked by the Espanyol goalkeeper before Ronaldo's long range effort nearly crept in after Kiko Casilla had parried a low shot onto the crossbar after some unorthodox goalkeeping.
Madrid make the perfect start to the second period and put the result beyond doubt on 47 minutes. Kaka was able to pick up the ball before gliding forward and beating the Espanyol offside trap with a precise pass to Higuain who smashed the ball past the helpless keeper from six yards out.
It was four goals for the home team in the 66th minute when Kaka grabbed the goal his impressive performance deserved. Higuain was able to lay the ball off to the Brazilian on the edge of the box as the former AC Milan man made his way past two Espanyol defenders before placing the ball into the net via the inside of the post.
Madrid made it a five star evening in the 78th minute as Kaka and Higuain linked up brilliantly once again. The 30-year-old playmaker showed excellent skill to get past his marker on the left side of the box before sliding the ball into the feet of Higuain who slammed it into the top corner from 15 yards for his 19th goal if the season to round off a great evening for Los Blancos.
Next up for Madrid is a trip to Betis while Espanyol entertains Rayo Vallecano as it looks to bounce back from tonight's heavy defeat.