Goals by Jimmy Briand and Lisandro Lopez each side of the interval were enough for last season's semi-finalists to grab all three points, but there could have been many more goals in an entertaining night at Gerland Stadium.
Lyon, French champions seven years in succession from 2002, lead Group B with nine points, three ahead of Schalke 04, who beat Hapoel Tel Aviv 3-1. Benfica have three points, Hapoel none.
"Yes, it was our best game of the season although we played very well (in a 3-1 win) against Lille (in Ligue 1 last Sunday)," coach Claude Puel told French TV channel TF1.
"We're growing stronger, technically and physically."
Puel's job was on the line after a terrible start to the season when they dropped into the relegation zone after losing four of their opening seven Ligue 1 matches.
But Puel's future seems more secure now as Lyon have won their last four games in all competitions, scoring 11 goals.
In a lively game, Lyon enjoyed possession and looked physically too strong for Benfica, who tried their luck on counter-attacks before fading away following the exclusion of Nicolas Gaitan just before the interval.
Pape Diakhate kept Benfica's attacking duo Pablo Aimar and Javier Saviola at bay with his well-timed tackles as the visitors struggled to break down Lyon's defence.
Michel Bastos, a permanent threat on the left flank, unleashed a shot from the edge of the box that smashed Benfica keeper Roberto's left-hand post in the 20th minute.
One minute later, Yoann Gourcuff released Bastos on the left and the Brazilian's cross found Briand at the far post for the French international to head home.
Gaitan picked up a second yellow card for a foul on Miralem Pjanic, virtually ending Benfica's chances.
Lyon striker Lisandro missed a couple of clear chances in the opening five minutes of the second half which left him smacking the ground in frustration, but he finally found the back of the net in the 51st.
Briand hit the woodwork with a fierce shot, Lisandro picked up the rebound but his header was saved by Roberto. However, the Argentine followed through and tapped in to double the tally.
Gourcuff, who looked to have regained his touch following a mediocre start to the season, found Bastos by the edge of the box with the gifted Brazilian firing a superb left-footed volley that was tipped away by Roberto.
After Bastos and Gourcuff were replaced midway through the second half, Lyon struggled a bit but they held firm to stop Benfica from launching a fightback.
"It was the perfect night because we won and we kept a clean sheet," Briand told TF1.
"But we could have scored more goals. It augurs well anyway."
Lyon will travel to Benfica on November 2 for their next Group B match.
