An outstanding goal from English teenager Jadon Sancho and a sliding finish from Marco Reus ensured Dortmund end the first half of the German season as "autumn champions" going into the winter break.
The win puts Dortmund nine points clear of 'Gladbach, who are level on points with reigning champions Bayern Munich who have a chance to cut the gap to six points when they face Eintracht Frankfurt on Saturday.
Sancho, the 18-year-old whose progress has been a major factor in Dortmund's fine season, squeezed a shot in from the tightest of angles on 42 minutes after the lively Reus had crossed and Mario Goetze helped the ball on to the youngster.
Gladbach pulled level just before the break with a controversial goal from Christoph Kramer, which came after a goalmouth scramble that appeared to involve a handball but which the referee ruled valid after checking the VAR.
After the break, Reus charged in to put Dortmund back in front with Goetze the provider. Reus then slammed a free-kick against a post as Dortmund returned to winning ways after losing for the first time this season Fortuna Dusseldorf on Tuesday.