The German driver left rival Damon Hill nearly 25 seconds behind and scored his eighth victory of the season Sunday, putting the young pilot in select company.
He tied the late Ayrton Senna for second in season victories and can tie record holder Nigel Mansell at nine with one more win.
Schumacher returned from a two-race suspension for ignoring a black flag at the British Grand Prix. In his last race before the ban he was disqualified at the Belgian Grand Prix for having a wooden plank on his Benetton-Ford too thin to meet technical requirements.
"It's just the way you like to come back to Formula One,'' Schumacher said. "I mean, that's where I left it.''
His last official victory was at the Hungarian Grand Prix in August before his win in Belgium was taken away.
Schumacher is back leading the field, with a total of 86 points in the drivers championships to Hill's 81. Hill had won the two races that the German driver missed but was no match for Schumacher in a head-to-head duel.
"Today we proved again how good we are,'' Schumacher said.
Mika Hakkinen of Finland in a McLaren-Peugeot earned his third straight third-place finish, more than a minute away from the winner. Schumacher averaged 182.507 kph over the 4.43-kilometer Jerez circuit and lapped all but three cars in the race.
Hill was down after the sound defeat.
"I'm pretty disappointed obviously, I have to say,'' Hill said. "I did get my hopes up. The margin of victory was greater than I would have liked as well.''
Eddie Irvine of Britain in a Jordan-Hart was fourth with Gerhard Berger in a Ferrari fifth and Heinz-Harald Frentzen in a Sauber-Mercedes sixth.
Hill overtook Schumacher, who had pole position, at the start and led for the first 14 laps as the pair pulled away from the rest of the field quickly.
Schumacher went in first at the end of 15 laps. Hill came in two laps later and came out of the pits just as Schumacher sped past.
By the time Hill got up to speed, he was more than four seconds down and the race for all practical purposes was over. By the end of 45 laps Schumacher held a 30-second advantage and never lost the lead after that, even after his third pit stop.
The next race is the Japanese Grand Prix on Nov. 6. The Australian Grand Prix concludes the season a week later.
Schumacher's return was a bit better than another returnee, Mansell, who came back to Williams-Renault for the season's final three races after two years on the Indy Car circuit in the United States.
Mansell was never a factor in the race despite qualifying third. He had a slow start and had to come in after 15 laps and lost a lap when he had to get his car's nose cone changed. He ended up spinning out into the gravel after 49 laps.
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