The victory, which arrived courtesy of a brace from Isco and goals from Karim Benzema, Cristiano Ronaldo and Casemiro, means that Los Blancos have now extended their lead over second-placed Barcelona to six points in Spain's top flight.
Ronaldo returned to the Real Madrid side after missing the Copa del Rey clash with Sevilla during the week, while Keylor Navas, Isco and Benzema were also recalled for the league leaders.
As for Granada, there were no fewer than nine loan players in their starting XI at the Bernabeu. Manchester United's Andreas Pereira was again joined in midfield by Barcelona's Sergi Samper, while there were also spots in the team for the likes of Chelsea midfielder Jeremie Boga and Swansea City's Franck Tabanou.
Real Madrid's first shot of the afternoon arrived in the 10th minute when Marcelo found a yard of space outside the Granada box, but the left-back's effort was never really threatening to find the back of the net.
Less than two minutes later, however, the home side were ahead when Benzema threaded a through-pass to Isco and the Spaniard produced a clever finish to find a route past Granada goalkeeper Guillermo Ochoa.
Pereira had Granada's first attempt in the 20th minute after working some space in a forward position, but the youngster's effort was always high of the target and less than 60 seconds later, Real Madrid scored their second when Benzema tapped home from close range after Ochoa had palmed a Luka Modric strike straight into the striker's path.
Real Madrid then had their third in the 27th minute when Ronaldo headed a Marcelo cross into the back of the net as the home side ended the match as a contest before the 30-minute mark.
It got worse for Granada when Isco tapped a Modric cross into the back of the net for 4-0 in the 31st minute, and Ochoa had to make a decent save five minutes later to prevent Isco from completing his hat-trick in the first period.
Ochoa again made a smart save to prevent Benzema from making it five early in the second period, while Isco also headed just wide of the post as the Spaniard missed his final chance for a treble before being replaced by James Rodriguez.
Real Madrid's fifth of the afternoon arrived in the 58th minute, however, when Casemiro tapped a deep James free kick into the bottom corner from close range, and the visitors would have been fearing conceding another nine at the Bernabeu, which was the case during the 2014-15 campaign.
Fabio Coentrao was introduced for Marcelo in the 68th minute as Zinedine Zidane handed the Portuguese a rare chance to impress during a period where opportunities were few and far between at the Bernabeu.
Tabanou was a touch fortunate to escape a red card 15 minutes from time following a late challenge on Dani Carvajal, and James came close from the resulting free kick as Los Blancos looked to put six on the board once again.
Ochoa made another superb save to prevent Ronaldo from making it 6-0 in the 87th minute, and that proved to be the final piece of major action at the Bernabeu as Granada remained in the relegation zone and Real Madrid continued their brilliant run of form.
Next up for Real Madrid is a trip to Sevilla in the second leg of their Copa del Rey last-16 clash on Thursday night, before visiting the same opponents in the league on Sunday night. Granada, meanwhile, will welcome basement side Osasuna in their next league match on Sunday.