The 22-year-old Mexican took command from the start and continually trapped Californian Lopez on the ropes, landing multiple punch combinations that led to knockdowns.
Alvarez floored Lopez with a left hook to the body in the second round, again in the third and fourth before the referee finally halted the contest with five seconds remaining in the fifth round.
"I am very happy with what I showed today," said Alvarez, who was improving his record to 41-0-1 with 30 knockouts.
"In boxing you are always learning and I still have a lot to learn. But I will be better next time."
Lopez, who was bleeding from his nose and mouth as the one-sided fight ended, said: "Canelo is a good fighter. He proved he is a better fighter.
"It is way out of my weight. I felt good, but the size was different for me."
On the undercard, IBF bantamweight champion Leo Santa Cruz retained his title by stopping two-time world champion Eric Morel in the fifth round.
Daniel Ponce De Leon also claimed the WBC featherweight belt by taking a unanimous decision from former champion Jhonny Gonzalez.