Diego Simeone's side had to play the whole of the second half with just 10 men after Gabi was sent off on the stroke of half-time, but its defence, which has now kept eight clean sheets in the row at the Vicente Calderon, was rarely troubled by a timid and impotent Espanyol.
The win saw Atletico cut Barcelona's lead at the top of La Liga to 12 points.
Jorge Molina opened the scoring inside the first 30 seconds and further goals from Mario and Dorlan Pabon increased Betis' lead before the interval.
The host even had the luxury of missing 35th-minute penalty through Molina as it comfortably picked up a first victory in six matches to climb back up to seventh spot on 39 points.
Fourth-placed Malaga also had Nacho Camacho sent off in the 63rd minute on what was a miserable night for Manuel Pellegrini's Champions League participant.
Also at the top end of the table, Rayo Vallecano's ambitions for Europa League qualification suffered a blow after a 2-1 loss at home to Real Valladolid.
The visitor took a second-half lead thanks to an own goal by Jordi Amat, who then scored an outstanding goal at the other end to equalise.
However, Manucho fired Miroslav Djukic's side in front once more on 79 minutes.
In the day's other game, new Celta Vigo coach Abel Resino enjoyed a perfect start to his spell in charge of the club with a hard-fought 2-1 win over former club Granada.
Iago Aspas gave the home side the lead on 24 minutes and although that goal was soon cancelled out by Odion Ighalo, Mario Bermejo grabbed the winner nine minutes from the end.
Resino was named as Paco Herrera's successor on Monday and inherited a club in the relegation zone, four points from safety and without a win in its last six league games.
And although it remains in the bottom three, the three points means it is just two behind Real Zaragoza in 17th.