Bruno Fornaroli, Luke Brattan and Fernando Brandan also scored to punish Victory - who replied through Marco Rojas - in a display which confirmed City's title credentials.
As is so often the case, the derby didn't lack for excitement or moments of magic.
But on his first league outing in Australia for 20 years, Cahill made the occasion his own in less than half an hour.
Seizing on a loose ball, the Socceroo struck a half-volley that whistled past Victory goalkeeper Lawrence Thomas from 35 metres.
Cahill had conjured something from nothing, leaving a bumper crowd of 43,188 wondering what they'd just seen.
The goal was no less than City deserved after working over Victory's defence.
And the full-time result was entirely fair too after City unleashed a scintillating display of attacking football.
John van 't Schip's inspired decision to play three defenders allowed City to overload Victory going forward, and in time that dominance paid off.
Cahill nabbed the first and Fornaroli added his name to the scoresheet four minutes later.
Nicolas Colazo overlapped on the left and zinged a cross to the back post where the Uruguayan pounced with a diving header.
Kevin Muscat's shell-shocked side were drowning, conceding 10 shots to one in a brutal first half.
It got worse on 52 minutes, when Brattan sidefooted home Bruce Kamau's cut-back before celebrating with City's jubilant fans.
The Victory coach responded by hauling off Mitch Austin and the disappointing Oliver Bozanic for Leigh Broxham and Nick Ansell, and soon had some reward.
Rojas danced his way past four City defenders to score past Dean Bouzanis to give Victory hope.
If not for Cahill's long-range stunner, it would have been an easy choice for goal of the match.
But Victory's delight didn't even last a minute before another flew in, sinking their chances of a first win of the season.
Brandan jinked Jason Geria as he powered towards goal, finishing past Lawrence Thomas at his near post.
Besart Berisha confirmed Victory's lacklustre night by heading a sitter wide with five minutes remaining.
