After Catalan minnows Girona snatched a 2-1 win over Valencia they moved temporarily top, but Madrid slid back above them on goal difference on a tranquil evening in the capital.
Brahim Diaz opened the scoring midway through the first half and Rodrygo doubled the lead after 57 minutes at the Santiago Bernabeu.
The Brazilian forward has scored seven goals in his last five games across all competitions, appearing at the perfect time to keep Madrid's strong start to the season going despite various absences.
Madrid are missing several key figures through injury, from goalkeeper Thibaut Courtois to winger Vinicius Junior.
However Los Blancos had more than enough to sweep past the Andalucians, 19th and battling against relegation.
"(Rodrygo) has returned to his best level, scoring a lot of goals," Ancelotti told reporters.
The coach reserved some praise for midfielder Toni Kroos, who set up Diaz's opener with a clever pass.
"He doesn't give balls away, he always chooses the best option, he's a midfielder who wants the ball," added Ancelotti.
"He is not afraid and he positions himself very well, it's his biggest virtue, his control too ... when he doesn't play, he's irreplaceable."
Without creating an excess of chances, Madrid quickly took control of the game.
After 26 minutes Kroos' superb pass sent Diaz in on goal and he stayed cool to gently nudge home and put Madrid ahead.
It was the former Manchester City playmaker's second goal in four matches, with Diaz showing he can help the red-hot Rodrygo fill the gap left by Vinicius' injury.
"We played the football that we know, it was a nearly perfect game, we dominated the match and they created very few chances against us," Diaz told Real Madrid TV.
Controlled performance
Jude Bellingham, La Liga's top goalscorer with 11 strikes, could have added another just before half-time but scuffed his shot across goal, the ball bobbling wide.
Madrid's second arrived after a neat team move, with Joselu and Diaz combining to tee up Bellingham.
Granada goalkeeper Andre Ferreira denied the midfielder but Rodrygo galloped onto the rebound and smashed home before the hour mark -- he has now netted in five consecutive matches.
Atletico Madrid, third, visit champions Barcelona, fourth, on Sunday, both looking to cut down the seven-point gap on the top two.
Earlier Girona fought back brilliantly to ensure they would not drop further points in the title race after a draw against Athletic Bilbao on Monday.
Trailing to Hugo Duro's 56th-minute strike with under 10 minutes remaining, Girona finally broke down Valencia's walls through veteran striker Cristhian Stuani's brace.
Stuani levelled after 82 minutes and bundled home another with two minutes to go, with both goals set up by Yan Couto crosses as fans at Girona's tiny Montilivi stadium went wild.
After dropping two points in a draw with Athletic Bilbao to start the week, Girona seemed poised to fall to only their second defeat of the season.
"It's good to recognise that we are making history, it can't be something normal that we've taken 12 wins from 15 games," Girona coach Michel told reporters.
"I only ask that in the bad moments we are united, I keep thinking that -- Madrid, Barca, Atleti, is not our league -- we will not keep up this rhythm, and we should all be sure about that."
Valencia set out to frustrate but substitutes Stuani and Couto made an impressive impact off the bench.
"I'm very happy for the team, for the fight that we had with the scoreline against us," Stuani told DAZN.
"The team did not let themselves surrender -- (Valencia) set up very well.
"We did not stop trying, we locked them in their box and in the end the goals arrived."
In only their fourth season in the top flight in their history, Girona keep finding ways to surprise.
"Girona move you around, they play with you, they are a magnificent team and there's a reason why they are first," Duro told DAZN.
Athletic Bilbao thrashed Rayo Vallecano 4-0 to consolidate their position in fifth, with Osasuna holding sixth-place Real Sociedad 1-1.
