Axel Witsel scored in the first half before a Raphael Guerreiro double and a Jadon Sancho goal sent Dortmund to the top of Group A.
4 - Atletico de Madrid have suffered their biggest defeat with Diego Simeone as manager in all competitions (4-0 vs Borussia Dortmund). Shock. pic.twitter.com/6tshWybRrF— OptaJose (@OptaJose) October 24, 2018
It was an historic defeat for Simeone, who has been in charge of Atletico since 2011.
During his time in charge the Argentine has transformed the Rojiblancos into one of the fiercest defensive sides in Europe.
Backed by their tremendous defence and standout goalkeeping from Thibaut Courtois and Jan Oblak, Atletico won La Liga in 2013-14, the Europa League in 2011-12 and 2017-18, and finished as the Champions League runners-up in 2013-14 and 2015-16.
This season, Atletico are fifth in La Liga and are now second in Champions League Group A, three points behind Dortmund, and they have struggled to keep opponents out.
The loss against Dortmund marked the first time that Atlético have conceded goals in four Champions League games in a row since October 2013, when the club ended a run of seven matches where they conceded.
For Dortmund, the win continued a trend of the Bundesliga side rolling up goals this season.
Lucien Favre's side have now scored four or more goals in five of their last six outings, with the other match seeing them take a 3-0 Champions League win over Monaco.
The goals are also coming in strange ways for BVB, with the club having seen substitutes net 16 times in 12 matches to date.
Dortmund youngster Jadon Sancho, who scored the third of the night for the German side, is the first English player to score for a non-British club in the Champions League since David Beckham against Rosenborg in November 2005.
He also became the second-youngest English player to score in the Champions League at 18 years and 212 days old. Alex Oxlade-Chamberlain was the youngest when he scored for Arsenal against Olympiakos in 2011 (18y 43d).
Dortmund sit three points clear in both Group A and in the Bundesliga, and face off with sixth-placed Hertha in a league clash on Saturday.