Thomas Muller scored a hat-trick as Germany stunned group rivals Portugal, who had defender Pepe sent off.
It was a brilliant display by the three-time champions, who took the lead when Muller fired in from the spot after Joao Pereira fouled Mario Gotze.
Mats Hummels made it 2-0 with a powerful header, before Pepe saw red for pushing his head at Muller.
Muller added his second with a sidefoot finish and completed the impressive victory by poking in from close range.