Richie Ryan put Sligo ahead in the fourth minute with a blistering free-kick after Dean Bennett was shown a straight red card for bringing down Matthew Blinkhorn as he raced in on goal.
Mark Quigley floated a Dundalk free-kick from near the halfway line into the box in the 10th minute but Sligo keeper Brendan Clarke gathered the ball without any difficulty.
A Joseph Ndo free-kick caused some anxious moments in the visitors’ defence on 18 minutes but the danger was eventually cleared.
The Lilywhites struggled to get a foothold in the game in the first half and allowed Sligo far too much leeway at the back, with the result that Paul Cooke’s side could do as they liked with possession.
Blinkhorn went close from an Ndo corner after 27 minutes as the home side continued to press forward with fast counter-attacks.
Ndo brought the home supporters to their feet on 35 minutes after the former Cameroon international sent a blockbuster of a shot past a stunned Paul Murphy in the Dundalk goal following a ball across the face of the goal by Aaron Greene.
There was no way back for the visitors on 61 minutes as John Dillon scored. Substitute Eoin Doyle bagged number four 10 minutes later before and an own goal by John Breen in the 86th minute completed a miserable night for Dundalk, who had Gregg Bolger sent off for a second bookable offence in the 90th minute.
Sligo will be happy with this performance but they will also be mindful of much sterner tasks away from home against St Patrick’s and Bohemians in the coming weeks.
SLIGO ROVERS: Clarke, Keane, Powell, McGuinness, Peers (Dillon 34), Ventre, Ryan, Russell, Blinkhorn, Ndo, Greene.
DUNDALK: Murphy, Madden, Bennett, Gaynor, N Murphy, Bolger, McDonnell, Ward, Quigley, Breen, Byrne.
Referee: D Hancock (Dublin).