Poland international Robert Lewandowski was the star of the show for the Bundesliga giants, scoring all four of his sides goals, as Dortmund helped the power shift in European football head towards Deutschland and away from Spain.
Lewandowski opened the scoring inside nine minutes when he was able to stroke home Mario Gotze's cross from the left to give the home side a dream beginning.
Just before the break, however, the ever-dangerous Cristiano Ronaldo slotted the ball into an empty net after Madrid had countered with Gonzalo Higuain making the most of an errant backpass from Mats Hummels to play the Portuguese ace in.
Five minutes into the second half, Dortmund restored their advantage when Lewandowski controlled Marco Reus' prodded through-ball to finish neatly past Diego Lopez amidst calls for offside.
A further five minutes on and Dortmund were in dreamland when the Pole produced the goal of the night. Marcel Smelzer's cross from the left landed at the feet of Lewandowski who took a brilliant first touch to get the ball out of his feet, then rolled the ball into a shooting position with his left foot before firing the ball into the roof of the net.
It only got better from there with Dortmund scoring a fourth, again through Lewandowski, who emphatically fired a penalty down the middle after Reus was felled in the area by Xabi Alonso.
Juergen Klopp's side will now head to the Santiago Bernabeu next Tuesday having to only avoid a three-goal defeat from Jose Mouriho's men in order to progress to the final where they could likely meet Bundesliga rivals Bayern Munich who punished Barcelona 4-0 in Bavaria last night.
2012/13 UEFA Champions League semi-final - first leg
Westfalenstadion (Signal-Iduna Park), Dortmund - 65,829