Benzema opened the scoring after only seven minutes with an outrageous effort that instantly recalled Marco van Basten's seminal goal for Netherlands in 1988, and what followed was a relentless procession of Madrid attacks, punctuated only briefly by a reply from Nino just after the break.
By that point, though, Madrid had already opened up a three-goal lead with Cristiano Ronaldo converting with another ferocious shot and Gonzalo Higuain lifting the ball over Andres Fernandez for a rather more considered finish.
Ronaldo added a fourth, and his 37th of the league campaign, when his free kick took a fortunate deflection to sneak past Fernandez and the forward then set up Higuain for the fifth, and Madrid's 100th in La Liga this season, with 13 minutes remaining.
The emphatic victory - which concluded with Osasuna being reduced to 10 men when Roland Lamah was shown two bookings for dissent in the space of five seconds - saw Madrid pull nine points clear of great rivals Barcelona ahead of the Catalans' match against Athletic Bilbao later in the evening.
Jose Mourinho employed a decidedly attacking formation with Benzema, Ronaldo and Higuain all deployed in front of playmaker Mesut Ozil. The suspicion that it could prove a long evening for Osasuna - despite the fact they had lost only twice at home all season - only grew when, after four minutes, Sergio was booked for a clumsy challenge on Ronaldo.
It took just a further three minutes for Madrid to open the scoring with a goal of such outstanding beauty that it would have been forever imprinted on the memories of those present to witness it.
Ronaldo took possession of the ball on the left wing and toyed with Osasuna for all of 10 seconds, pulling out tricks and stepovers as he waited to dart past his marker and clip a cross to the far post. Benzema then met his delivery with a perfectly-executed volley from a tight angle that soared back across goal and inside the far post.
Having seen the spotlight taken from him in such stunning fashion, Ronaldo appeared keen to emulate his team-mate and soon struck a wonderful effort from range after cutting in from the left, his effort dipping viciously but flying just over the bar.
As Osasuna wilted in the face of some devastating counter-attack from an ebullient Madrid side, coach Jose Luis Mendilibar was sent to the stands following an act of dissent on the touchline. His dismissal only ensured he had a better seat from which to watch another stunning goal, this time from Ronaldo.
The forward - who last weekend became the fastest player to reach 100 Liga goals, surpassing the record set by another Madrid icon in Ferenc Puskas - controlled the ball 35 yards from goal and unleashed a ferocious effort that swerved wickedly in the air and flew past Fernandez, who probably should have got closer to it.
With Ozil also testing Fernandez with a thumping drive at his near post, Osasuna's six-game unbeaten record was being reduced to rubble, and the home side had only a poor effort from Nino to enjoy after he muscled Marcelo off the ball and dragged a shot across the face of goal.
Five minutes before half-time, Madrid's rampant attack struck again. Esteban Granero found Higuain's perfectly-timed run with a delicious through-ball and the Argentina international advanced on Fernandez before lifting his shot over the keeper, who got a faint touch, and into the far corner.
Such was Madrid's dominance in the first half, it came as a real shock when the home side pulled a goal back within three minutes of the restart. Alvaro Arbeloa was caught out at the back post when Nino slipped in behind him to meet a deep cross from Roversio with a fine header to beat Iker Casillas.
Javad Nekounam then tested Casillas with a lovely drive from long range as Osasuna applied more pressure on the league leaders, but Madrid should have put the result beyond any doubt after 52 minutes, only for Ronaldo to sabotage his own side's efforts in bizarre fashion.
Ozil played in Higuain and after rounding Fernandez the striker had only to roll the ball home from a tight angle to make it 4-1. However, Ronaldo spotted an opportunity to augment his already outstanding tally of goals for the season and made to shoot himself, succeeding only in colliding with Higuain as the ball rolled out of play.
Ronaldo then chose to infuriate his opponents when falling to ground rather easily to win a free-kick after 70 minutes, punishing Osasuna to the full when he saw his low effort from the set-piece take a big deflection off Dejan Lekic and wrong-foot Fernandez for a fourth.
Madrid had to wait only seven more minutes to reach a century in La Liga for the season. Ronaldo tormented Roversio once again on the left and lifted a cross in for Higuain, who headed home unmarked for an easy second.
As Osasuna lost their composure in the closing stages, there was still time for Lamah to join his coach in the stands as he was booked for dissent and then continued to abuse the referee to earn an idiotic red card.
Madrid were content with five, and 100 for the season, though as they took another important step towards deposing Barcelona as Spanish champions.