Goals from Henrik Larsson and Alan Thompson extinguished any doubts that Celtic will depose Rangers as Scottish champions at the end of the season.
Larsson set Celtic on their way to victory at Ibrox, rising above Michael Ball to head home from six yards.
Thompson made sure Celtic increased their lead to 19 points by rounding Stefan Klos to finish after the break.
Substitute Steven Thompson gave Rangers late hope by heading home a Chris Burke corner with eight minutes remaining.
But it was not enough to avoid a defeat that also resigned Rangers to a record fifth straight Old Firm derby defeat and extended Celtic's unbeaten league run to 30 games.
Rangers captain Craig Moore had returned from injury to replace unfit Frank de Boer in defence.
Celtic also made just one change, Bobo Balde, who missed the midweek Uefa Cup victory over Barcelona through suspension, replacing the injured Jackie McNamara at the back.
Rangers boss Alex McLeish had warned his side about Celtic's set-pieces and the visitors scored from their first after 20 minutes during which Rangers dominated possession.
Thompson flighted a free-kick into the six-yard box, Ball failed to properly mark Larsson and, with Stefan Klos stuck on his line, the Swede headed firmly down and into the net.
Henrik Larsson beats Michael Ball in the air to score
David Marshall, the hero of the Nou Camp, pulled off two breathtaking saves in quick succession to prevent an equaliser.
A Ball cross looked to be heading for the corner of the net after deflecting off defender Varga before Marshall's fingertips diverted it wide.
Alan Hutton, who retained his place ahead of Fernando Ricksen, thought he had scored with a powerful downward header until his fellow 19-year-old somehow palmed it wide at full stretch.
Peter Lovenkrands squandered a great chance, driving the ball into the side-netting from seven yards after being set up by Michael Mols.
Hutton produced the first goal threat of the second half, but his shot from the edge of the box was deflected just wide of the far post.
Celtic sealed victory after 51 minutes, when Zura Khizanishvili was robbed on the edge of the box by Larsson.
The Swede set up Pearson and, when his shot was blocked by Klos, Thompson rounded the goalkeeper and stroked the ball into the net off the toe of Bob Malcolm.
It was almost 3-0 when Chris Sutton's header was poked on to the crossbar by Varga from just three yards.
Klos produced a point-blank save to deny Larsson from eight yards and Marshall did likewise at the other end to prevent Mols reducing the deficit.
Thompson rose to head home for Rangers after 82 minutes, fellow substitute Burke having lifted Rangers' performance.
And Ball squandered a late chance of an equaliser.
Rangers: Klos, Hutton, Khizanishvili, Moore, Ball, Rae,
Malcolm, Hughes, Lovenkrands, Mols, Ronald de Boer.
Subs: McGregor, Ricksen, Thompson, Berg, Burke.
Celtic: Marshall, Balde, Kennedy, Varga, Agathe, Petrov, Lennon, Pearson, Thompson, Larsson, Sutton.
Subs: McGovern, Sylla, Lambert, Mjallby, Miller.
Referee: K Clark (Scotland).