Wallace was in electric form in making two tries and scoring one as Ulster top the league by two points from Dragons who defeated Llanelli.
Fly-half Adam Larkin got the show on the road with a 40-metre penalty in the seventh minute, then five minutes later Wallace broke clear to fed flanker Neil Best who touched down at the posts.
Larkin converted and did the same when Wallace again danced through the Ospreys defence before feeding winger Scott Young to dive over.
Then Wallace started and finished a try for Larkin again to convert as they raced to a 24-0 lead.
Ospreys then ran the ball from a line-out and left winger Gareth Morris came in to score with Gavin Henson converting.
They grabbed a second try 20 minutes after the break when skipper Barry Williams drove over from a line-out for an unconverted try.
But that only stirred Ulster; replacement Warren Brosnihan dived over with Larkin converting to get that vital bonus point.
Ospreys ended the evening with their third touchdown as Dave Tiueti scored and converted the try himself.
B Cunningham; J Topping; P Wallace, P Steinmetz, S Young; A Larkin, N Doak; R Kempson, P Shields, R Moore, M McCullough, G Longwell, A Ward (capt), N Best, R Wilson.
Replacements: P Shields for Sexton (43), B Young for Wilson (75), M Mustchin for Longwell (53), W Brosnihan for Best (59), K Campbell for Doak (76), A Maxwell, S Coulter.
Scorers: T: Best, Young, Wallace, Brosnihan; P: Larkin; C: Larkin 4
G Henson; S Terblanche, D Tiueti, S Gibbs, G Morris; S Connor, A Williams; T Evans, B Williams (capt), A Millward, A Newman, L Tait, J Bater, S Tandy, A Lloyd.
Replacements: C Wells for Williams (76), N Bonner-Evans for Lloyd (53), A Clatworthy for Millward (70), A Durston for Henson (64).
Scorers: T: Morris, Williams, Tiueti; C: Henson, Tiueti.
EDINBURGH'S lack of resources was cruelly exposed again as Connacht cruised to a comprehensive Celtic League success at Meadowbank.
With so many first-choice players absent on Scotland duties, coach Frank Hadden's worst fears were realised as he was forced to send rookies into battle against seasoned professionals.
The Irishmen, looking for revenge after their Celtic Cup semi-final defeat, seized control and deservedly broke the deadlock after seven minutes when Darren Yapp went over for a try converted by Eric Elwood.
But Edinburgh responded when winger Conan Sharman claimed the touchdown after scooping up his own chip-ahead. But the referee ruled he had been obstructed in the chase and awarded a penalty try.
Connacht's second try came in the 26th minute and again Yapp was involved, combing superbly with Shane Moore to create the space and time for Matt Mostyn to finish safely.
Elwood slotted the conversion and then thumped over a short-range penalty when the home pack handled in a ruck in their own 22. Connacht looked hungry again after the restart and they effectively snuffed out the Edinburgh challenge by setting up another try in the 42nd minute from McPhillips.
Warnock clawed back a penalty for the struggling Gunners, but any lingering prospect of a fightback disappeared as Shane Moore ploughed over to make sure of the bonus point. for Connacht.
Southwell, Sharman, Di Rollo, Dey, Joiner, Warnock, Burns, Jacobsen, D. Hall, Brannigan, Pike, Kellock, A. Dall, Martyn, Harrison. Edinburgh scorers: Tries: Penalty, Jacobsen. Cons: Warnock 2. Pens: Warnock.
McHugh, Mostyn, Yapp, Moore, McPhillips, Elwood, O'Loughlin, McFarland, Jackman, Clarke, Browne, Farley, Muldoon, Carter, O'Sullivan. Connacht scorers: Tries: Mostyn, Yapp, Moore, McPhillips. Cons: Elwood 3. Pens: Elwood.
Cardiff Blues 29 Glasgow 19; Gwent Dragons 15 Llanelli Scarlets 9.