The Tykes raced into a three-goal interval lead and even missed a late penalty as they put a serious dent in the Hatters' title hopes.
To make matters worse for Mike Newell's side they ended the match with ten men after Chris Coyne was dismissed for a rash challenge on Michael Chopra.
Town started well and nearly took the lead in the fifth minute when Steve Howard's close-range header was scrambled clear by the visitors.
When Barnsley hit back, Anthony Kay flicked on Stephen McPhail's cross only to see his header hit the foot of Marlon Beresford's post.
The visitors eventually took the lead in the 32nd minute when Chris Shuker slotted home the loose ball after Beresford could only parry Chopra's close-range shot.
Five minutes later it was 2-0 when Shuker's shot deflected off Curtis Davies and rolled into the net.
Amazingly Andy Ritchie's side added a third goal when Chopra smashed the ball home just before half-time.
Luton improved after the break but the damage had already been done.
Enoch Showunmi pulled a goal back in the 67th minute with a sharp turn and shot, but in truth the Tykes hung on reasonably comfortably to their lead.
Six minutes later they were reduced to ten men when Coyne was shown a straight red card for a late tackle on Chopra.
Barnsley were awarded a penalty after Chopra went down under a challenge from Michael Leary and although Beresford saved Chopra's weak effort in the end the stop was merely academic.