Palace have made their mark with a run of eight wins and six draws while Wolves - early favourites for promotion - continue to fall away from the promotion race.
Mick McCarthy's men have now not tasted success in eight games and they have a miserable tally of just four points from a possible 24.
And, despite fielding new £1.5million striker Sylvan Ebanks-Blake, they have managed to find the target only 24 times in 27 League outings.
It has been much different for on-song Palace with striker Clinton Morrison opening the scoring at Molineux with his tenth goal in 12 League games.
Ben Watson crossed the ball into the middle where it found its way to Morrison and he made no mistake with a terrific right-footed volley.
Palace, now in the play-off zone, while Wolves are down to 12th spot, stretched their lead four minutes after the break when their marksman was the hard-working Sean Scannell.
John Halls crossed from the right, Morrison mis-hit his shot and Scannell was perfectly positioned to lash his close-range effort past the helpless Wayne Hennessey.
It was 3-0 to Palace in the 64th minute when James Scowcroft stunned Hennessey as he lashed in a superb 30-yarder that flew into the back of the net.
Wolves' dreadful afternoon was made complete in the 80th minute when Andy Keogh created a golden scoring opportunity for Jay Bothroyd but the striker ballooned his shot over the crossbar from only five yards.
It was a poor all-round display from Wolves with Keogh also guilty of poor marksmanship as he powered his close-range header high over the woodwork.
It was always Palace who held the upper hand with Scowcroft squandering a superb chance as he too shot over the woodwork when it looked easier to score.