Bouncing back from last weekend's stunning 4-0 loss to Catania, Lazio boosted their confidence behind two goals from Libor Kozak and a third strike from Sergio Floccari.
The win moves Lazio on to eight points, two clear of Tottenham at the top of the group.
It took time for Lazio to get into their stride, with no efforts on Orestis Karnezis' goal coming until Floccari shot straight at the goalkeeper in the 21st minute.
But that was only a warning shot before they took the lead moments later, with Stefan Radu setting up Kozak to fire high into the net from the edge of the area.
Kozak scored the second with his next chance, slotting home with his left foot five minutes before the break.
It remained one-way traffic in the second half and although Karnezis was able to push clear Maura Zarate's curling effort, he was beaten for a third time in the 58th minute when Floccari headed in Zarate's free-kick.
The chances continued to come for the dominant Lazio, but their finishing was not so clinical in the final half hour.
Floccari blazed wide while Karnezis comfortably held a shot from Zarate and pushed Ogenyi Onazi's effort to safety.
Federico Marchetti had been a virtual spectator in the Lazio goal, but was called on to keep out a Giorgos Seitaridis effort in the 72nd minute.
Another Zarate free-kick caused Panathinaikos problems but Michael Ciani's header went over, while Lazaros Christodoulopoulos sent a powerful effort wide at the other end.
Kozak's hopes of a hat-trick were ended when he was replaced by Miroslav Klose with a little over 10 minutes left in the match, but Lazio were already assured of the points.