Adam Johnson, making his first start since injuring his ankle in January, opened the scoring in the ninth minute and skipper Carlos Tevez doubled the Blues' advantage on the quarter-hour mark from the penalty spot.
Second-half strikes from David Silva, Patrick Vieira and Yaya Toure completed the rout as City leapfrogged Chelsea in the table and moved further clear of fifth-placed Tottenham in the race for Champions League football.
Roberto Mancini's side are now six points ahead of Spurs, who do have a game in hand.
Sunderland, meanwhile, have gone seven league games without a victory and need rapid improvement if they are to avoid being dragged into the relegation dogfight.
With Tevez fit again having missed City's 2-0 defeat at Stamford Bridge a fortnight ago with a groin problem, Mancini opted to pair the Argentina forward with Mario Balotelli and drop Edin Dzeko to the bench.
Additionally boosted by the return of Johnson, it was a positive-looking team selection which quickly paid dividends, the hosts making a lively start to the game before taking the lead nine minutes in.
Playing a one-two with Toure down the right, Sunderland-born Johnson received the return pass in the box, controlled the ball and then lashed it past Black Cats goalkeeper Simon Mignolet.
Six minutes later Tevez latched on to a lofted ball from Silva and burst into the area, where he was brought down by Phil Bardsley.
Referee Howard Webb booked Bardsley and awarded a penalty which Tevez took himself.
Mignolet dived the right way and appeared to get a hand to the effort but it squeezed in off the upright and City were cruising.
They were on the offensive again soon after, Bardsley getting in a block to divert Tevez's strike behind for a corner.
A Michael Turner handball earned City a free-kick which Aleksandar Kolarov could only send wide of the post.
Balotelli then tried his luck after being teed up by Tevez but Mignolet saved the attempt.
Sunderland were showing little sign of getting themselves back into the match but had a rare shot at goal in the 37th minute when Asamoah Gyan sent in an effort from outside the box which dropped narrowly wide.
Black Cats boss Steve Bruce replaced Bardsley with Ahmed Elmohamady at half-time but City were soon threatening again after the restart.
Silva played a deft chip into the box and Johnson was there to shoot against Mignolet, although he was incorrectly adjudged to be offside.
Balotelli then drove into the area and brought a save out of Mignolet, before City's third goal arrived.
Tevez ran on to a long ball from Nigel de Jong and squared for Balotelli, whose shot ricocheted off Turner, allowing Silva to tuck home from close range.
Johnson was then taken off for Vieira, which swiftly looked like a stroke of genius on Mancini's part.
A minute after his introduction, the Frenchman was on the scoresheet, getting on the end of a Kolarov cross which deflected off Joleon Lescott.
Mignolet clawed Vieira's effort away but the goal was given and replays showed the ball had indeed crossed the line.
Having conceded twice in four minutes, Sunderland looked utterly deflated and after Balotelli had stung Mignolet's palms, it came as little surprise when City scored their fifth.
Lee Cattermole lost his bearings and gave the ball straight to Toure, who gleefully dispatched it over Mignolet and in.
Shaun Wright-Phillips came on for Silva and provided a cross for Tevez, who put the ball the wrong side of the post.
Elmohamady summed up Sunderland's afternoon when he rose unmarked in the box but sent his header off target, and Balotelli almost made it 6-0 in stoppage time with a free-kick that Mignolet tipped over.
It made for an interesting afternoon's entertainment for Manchester United manager Sir Alex Ferguson, who was watching from the stands and will pit his side against City in the FA Cup semi-final at Wembley later this month.