Charles Aranguiz grabbed a goal in each half, including breaking the deadlock in the third minute to set the tone for a dominant performance from the Copa America hosts.
Alexis Sanchez, fit to start before being taken off at half time, and Gary Medel also scored as Chile made it seven successive wins over La Verde in competitive matches. The result also means they will remain in the capital city for their quarter-final.
An own goal from captain Ronald Raldes, who turned Angelo Henriquez’s cross into the net in the closing minutes, completed a miserable night for Bolivia.
Yet, despite the heavy defeat, they still had cause to celebrate. They had been certain of going through to the last eight prior to kick-off, courtesy of Ecuador’s 2-1 win over Mexico earlier on Friday.
Chile wasted no time stamping their authority on proceedings, Aranguiz putting the host nation ahead in a hurry.
Chile continued to dominate possession and they almost doubled their lead in the 19th minute via Alexis, the Arsenal star seeing his free-kick hit the outside of the post.
The woodwork denied Sanchez again 12 minutes later, when his set-piece sailed over the wall and cannoned off the crossbar.
However, the forward – who had been an injury doubt prior to the game – finally got the goal he deserved eight minutes before half-time, having started and completed a counter-attacking move.
Bolivia gifted away possession on the half-way line and Alexis pounced, playing the ball out wide to Jorge Valdivia, who delivered a cross for his team-mate to dive low and head past goalkeeper Romel Quinonez.
Vargas missed the opportunity to put the result virtually beyond doubt in the 41st minute, dragging his shot wide of the target with the goal gaping at his mercy.
Alexis and Arturo Vidal were withdrawn at the break, and their absence took the sting out of the match, though Chile still managed to breach Bolivia’s defence three more times.
Aranguiz netted his second of the match in the 66th minute, substitute Henriquez squaring the ball across the six-yard box for his team-mate to poke home from close range.
Medel got in on the action in a rare foray forward 11 minutes from time, looping the ball over the onrushing Quinonez.
Bolivia’s defeat was capped by defender Raldes, whose attempted clearance drifted over his own ‘keeper to gift Chile their fifth and final goal.