Kevin Doyle set Wolves on their way with a fine goal before the break and Ronald Zubar and Matthew Jarvis struck inside three second-half minutes to lift Mick McCarthy's side seven points clear of the drop zone.
Wolves are probably two wins from safety but this mauling leaves West Ham perched perilously just three points above Hull, Burnley and the relegation zone.
And on the evidence of this performance, West Ham are in serious danger of dropping into the Championship. Guillermo Franco came off the bench to score in injury time but it was the hollowest of consolation goals and, by then, Upton Park was almost empty.
The new joint-chairmen David Gold and David Sullivan were still in their seats, though, and they had to listen to the boos and the chants of "you're not fit to wear the shirt".
Wolves fired a warning shot inside eight minutes when Doyle beat Matthew Upson to a long ball and flicked it on for Kevin Foley, who struck a rising shot from an acute angle that beat Robert Green but rattled the crossbar.
Scott Parker tried his luck from distance for the Hammers and Julien Faubert dragged a shot across goal but the hosts lacked a cutting edge and had nothing to show for all their possession when Wolves landed a sucker punch.
James Tomkins failed to deal with a simple pass 40 yards from his own goal, Doyle pounced on the loose ball and bore down on goal before sliding his angled shot past Green and into the far corner.
The goal sparked a major shift in momentum. Wolves began to dictate play and should have had a penalty when Radoslav Kovac chopped Dave Jones down on the edge of the box but referee Dowd waved play on.
West Ham were chasing shadows as Wolves built a slick move with Michael Mancienne and Doyle interchanging passes wonderfully to create a shooting opportunity for Jones, which was deflected wide.
McCarthy opened up the Wolves defence with a clever lay-off for Parker, who charged into the box and curled a right footed shot past Hahnemann but it rebounded off the inside of the post and rolled across the goal-line.
But Wolves scrambled the ball clear and preserved their lead into the interval, when Zola made two key changes with Tomkins replaced by Jonathan Spector and Junior Stanislas sent on for Kovac.
Soon after the break, Faubert picked out McCarthy at the near post but the South African striker could not twist his header on target and it drifted wide.
Diamanti, who had switched wings to accommodate Stanislas, worked some space in-field and tested Hahnemann with a bobbling effort from 25 yards but the American keeper was equal to it.
West Ham almost gifted Wolves another goal when the alert Jarvis came close to intercepting a poor header from Faubert back to Green.
But it was only a temporary reprieve as Wolves struck twice in three minutes.
West Ham failed to clear their lines properly and Ronald Zubar raced onto Jones' pass into the box and he drove a cross-shot low past Green.
Jones was the creator again and this time Jarvis latched onto his through-ball into the box and he fired Wolves into a 3-0 lead, sparking elation in the away end and anger everywhere else.
Chants of "your not fit to wear the shirt" rang around the stadium and the "clap-banners" West Ham had provided to help create and atmosphere were thrown in fury.
Franco scored with a deft chip over Hahnemann but the game had long since gone as Wolves sealed a deserved victory.