The opening period was always going to be difficult for El Tri, with Juan Antonio Pizzi's side pressing from the first minute.
In the 15th minute, a Marcelo Diaz shot was spoiled over for Edsun Puch, who fired past Guillermo Ochoa to give Chile the early lead.
Chile continued their dominance and Eduardo Vargas made it 2-0 at the stroke of halftime.
Less than four minutes of the second half had passed, and a delightful passing sequence finished with Alexis Sanchez scoring the 3-0.
Juan Carlos Osorio's half-time team talk must had done little for El Tri as Eduardo Vargas scored twice in a space of five minutes to put things at 5-0 with 30 minutes still to go in the game.
In the 74th minute, Vargas piled the agony for Mexico by completing his poker following a mix-up from the Mexican defense.
Puch, who is set to join Liga MX side Necaxa, completed a historic night for the Copa America champions by scoring the embarrassing 7-0.
With the result, Mexico saw their 22-game unbeaten run come to an end as Chile became the last semifinalist of the Copa America and will take on Colombia for a chance at repeating their title.