Vargas at the double as Chile rout Japan
Vargas, who plays for Mexico club Tigres UANL, netted twice in the second half as Chile gradually overpowered a skillful but limited Japan, who are playing in the South American showpiece as one of two invited teams from Asia.
Erick Pulgar had opened the scoring for Chile in the first half before Vargas doubled the 2015 and 2016 champions' advantage with a deflected second-half strike.
Manchester United's Alexis Sanchez then took his Chilean record goals tally to 42 after diving to head home in the 82nd minute before Vargas scored the pick of the goals moments later with a deft lob over Japan goalkeeper Keisuke Osako.
The win saw Chile join Uruguay at the top of Group C, level on points and goal difference.
The scoreline was harsh on Japan, who had carved out several promising chances but were let down by poor finishing from young striker Ayase Ueda.
The Japanese had started confidently, dominating territory and possession albeit without threatening the Chile goal.
Their best early chance came after nine minutes when Shoya Nakajima let fly after bursting forward only to see his shot saved by Chile goalkeeper Gabriel Arias.
As the first half wore on, Chile looked increasingly more threatening, andÂ Sanchez sounded the alarm in the Japanese defence in the 35th minute when his low shot flashed just wide.
Sanchez then almost played in Charles Aranguiz but the Bayer Leverkusen midfielder took too long to get his shot away, allowing Japan to deflect behind from a corner.
- Chile dominant -
Aranguiz made amends though in the 41st minute by delivering the setpiece which gave Chile the lead.
A whipped corner from the right caused havoc in the Japanese area, and Bologna midfielder Pulgar leapt high above Yuta Nakayama to head home.
The goal reflected Chile's dominance, but Japan were gifted a glorious opportunity to equalise just before half-time.
Chile coughed up possession inside their own half and Gaku Shibasaki released Ueda on goal.
The 20-year-old Ueda was unable to make the chance count though, rounding Arias but failing to find the empty net with his shot from a tight angle.
The half closed with Chile threatening to add to their lead, Sanchez's header from close range saved by Osako.
Chile picked up where they left off as the second half got under way, stroking the ball around confidently to deny Japan possession.
In the 54th minute the Chileans doubled their lead.
A fluent build-up saw Mauricio Isla go clear down the right and he squared for Vargas, whose shot took a wicked deflection off Takehiro Tomiyasu on its way into the net.
Once again though, a Chilean goal was followed by a golden Japan opportunity, which they again squandered.
Shibasaki's fine cross picked out an unmarked Ueda at the back post but the youngster's composure again deserted him, hooking his shot wide with Arias and the Chile goal at his mercy.
Ueda missed another chance in the 69th minute but Chile slammed the door shut on hopes of a revival when Sanchez headed in Aranguiz's cross on 82 minutes before Vargas made it 4-0 a minute later.