The capital clubs have a three-point lead over Barcelona, who play their game on hand at Sevilla on Sunday night and could yet end the weekend back at the summit.
At the Bernabeu, Karim Benzema scored twice and Gareth Bale marked his return from injury with a goal and an assist in Real's impressive victory.
In the end, Cristiano Ronaldo's absence hardly mattered. Having spent considerable energy on attempting to repeal the three-match ban handed to the FIFA Ballon d'Or winner, Madrid were turned down and had to field a side to face Villarreal without their talisman.
Not to worry, they had Benzema, and Bale, and Jese. Bale opened the scoring on seven minutes, as defender Chechu Dorado dawdled on the ball on the left side of the pitch and the Welshman stole in to take it off his toes, run in on Sergio Asenjo and skilfully lift the ball over the goalkeeper.
Bale crossed for Benzema to double Real's lead on 25 minutes and although the visitors pulled a goal back late in the first half through right-back Mario, starlet Jese restored Real's two-goal advantage after a slick move.
A superb free-kick from Giovani dos Santos gave Villarreal hope once more on 69 minutes, but Benzema wrapped up the win in style from Jese's pass seven minutes later.
Atletico surprisingly went down 2-0 at Almeria. After Aleix Vidal had hit the woodwork for the hosts, midfielder Verza opened the scoring on 80 minutes as his cross from the left flew in past Dani Aranzubia.
Worse was to follow for the Atletico keeper when he was sent off six minutes later for bringing down Sundy Zongo, with midfielder Gabi going in goal. His first task was to pick Verza's penalty out of the net as Almeria picked up a vital win in their fight against the drop.
Paco Alcacer scored twice as Valencia followed up their Nou Camp heroics by thrashing lowly Real Betis 5-0 at the Mestalla.
Having beaten Barcelona in their last outing, Valencia began positively and took the lead after 41 minutes through a header by Jeremy Mathieu.
Alcacer doubled Valencia's advantage on the stroke of half-time, and added his second in the 67th minute, soon after Sofiane Feghouli had made it 3-0.
Eduardo Vargas marked his full debut for Valencia by scoring the fifth goal with 11 minutes remaining.
Rayo Vallecano breathed life into their hopes of avoiding relegation with a resounding and morale-boosting 4-1 win over Malaga, who had to play the entire second half with 10 men.
Tottenham loanee Iago Falque broke the deadlock midway through the first half with a fine individual goal and a deflected effort by Anaitz Arbilla just a minute later doubled the hosts' advantage.
Joaquin Larrivey slotted in a penalty on 45 minutes and Sergio Sanchez was given a second yellow card for conceding the spot-kick.
Rayo then coasted to victory, Falque scoring another impressive goal but Ukrainian forward Oleksandr Iakovenko got a late consolation for Bernd Schuster's side.