And the margin of it means they have a superior goal difference to the Merseyside club.
It also took their goals tally to 15 from the last three games and the spree puts them in fine fettle for next Sunday's showdown with Everton at Goodison Park.
Villa manager O'Neill said: "We've given ourselves a chance and we have to win there to take advantage of it."
While O'Neill was confident Villa could maintain their challenge for fifth place by beating Birmingham, he was surprised at the ease of the victory.
He added: "'We're in a rich vein of form but I couldn't have envisaged it being so comprehensive."
O'Neill admitted, however, choosing his man-of-the-match was less clear cut and said: "Ashley Young did his chances of getting in future England sqauds no harm at all. He was brilliant and Jon Carew was unplayable."