Sam Vokes, Jody Craddock and David Jones scored in the first 19 minutes as Wolves secured an easy win to edge closer to Premier League promotion.
Struggling Southampton, needing a win to move out of the relegation places, went behind after 32 seconds when Vokes headed home Jones' corner.
Wolves extended their lead five minutes later with Craddock heading Jones' cross into the back of the net.
Jones then converted from the spot for 3-0 after David Edwards was fouled.
Vokes, Andy Keogh and substitute Marlon Harewood all went close to netting a fourth.
Wolves' victory - their first at home to Southampton since 1979 - extended their lead at the top of the Championship to five points.
Wolves manager Mick McCarthy:
"It's three points. It means I can enjoy a bottle of beer tonight and watch everybody else.
"For today, for this evening, it's taken the pressure off me and my players and it's heaped it somewhere else - whoever fancies it they can have it.
"It could have been really over and done with in the first half. We broke on a number of times but we weren't really clinical."
Southampton coach Mark Wotte on his team's start:
"It throws away all the preparations. We knew that Wolves would be on fire after their performance against Birmingham so we told them to be very aggressive at the beginning of the match.
"We expected Wolves like they came, but if you don't win your headers and don't attack the ball then it's already a very difficult game.
"After 20 minutes they get the penalty and it's 3-0, and it's more or less game over.
"I'm just blaming my team for not dealing with set-pieces better than they did."
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