A moment of individual brilliance from the Argentine striker turned the game on its head after Michel's early opener had sparked Jose Mourinho's men into action
After a slow start to the game Los Granotes stunned the home fans as Michel scored on the break to put his side ahead. The goal appeared to spark a lax Madrid side into action and a spectacular goal from Gonzalo Higuain was quickly added to by a Kaka penalty. Los Merengues finally finished things off as Cristiano Ronaldo slammed in a third before setting up Mesut Ozil for his first of two late goals.
A number of rotations to Jose Mourinho's team made for a low-key start in which Gustavo Munua was forced into his first save in the 17th minute as he positioned himself well to keep the lively Kaka's effort out of the top corner.
Levante was sitting extremely deep with every man behind the ball for large parts of the half, enabling Los Blancos to dictate the tempo of the game. Yet the hosts continued to amble through the game and it ended up costing them dearly in the 31st minute.
After absorbing some more pressure Levante countered with Iborra finding Michel with space to run into. He slid a pass to his right for Pedro Rios who then returned the favor with a cutback from the byline and the former Valencia man's deflected shot got the better of Lopez.
Higuain ensured that Madrid only remained behind for five minutes with a moment of pure brilliance. From Xabi Alonso's cross, the Argentine met the ball with an acrobatic volley that gave Munua no chance and flew straight into the net.
The score was overturned just three minutes later as Los Merengues were awarded a penalty for handball by Christian Lell. Kaka took responsibility from the spot and sent the keeper the wrong way with a cool finish.
Ronaldo was introduced for the start of the second half and momentum remained with the hosts, though Higuain and Karim Benzema were unable to double the lead within five minutes of the restart.
However, Madrid again reverted to shooting from range and Mourinho would surely have been irate with his side had Robert Acquafresca's 56th-minute volley crept in the bottom corner.
The reigning Liga champions continued to pepper Munua's goal with shots but they lacked the conviction to kill the game off. Higuain and Arbeloa were both thwarted in quick succession 15 minutes from time as the outcome remained in the balance.
But victory was finally assured in the closing stages as the Argentine striker's drilled cutback was controlled by Ronaldo and then volleyed past the idle keeper.
The Portuguese then turned provider as he past up the opportunity to net a second by rolling the ball across the box to offer Ozil a simple tap in for Madrid's fourth.
Ozil then wrapped up a brilliant cameo as he followed his pass to Angel di Maria and as the winger let the ball get away from him in the area, he was on hand to slide in a second.
Los Blancos temporarily closed the gap on league leader Barcelona to 10 points, while Levante's challenge for a top-four spot looks to have all but vanished.