Three first-half goals helped send Laois to the Joe McDonagh Cup final and two more in the second half were the nails in Kerry's coffin that puts the Kingdom into what is effectively a relegation play-off against Offaly next weekend.
The result ensured that Laois maintained their perfect winning record with a deserved eight-point win in Tralee.
With so much still at stake coming into today's Round 3 games, Laois knew that after Antrim lost to Westmeath earlier in the afternoon, victory for themselves over Kerry would be good enough to secure them a place in the McDonagh Cup final, and a possible All-Ireland preliminary quarter-final fixture against the third-placed team from Leinster or Munster.
And so it came to pass as Eddie Brennan's players took full advantage of a first half wind and some apparent nervousness and loose touches in the Kerry team to rattle in those three first half goals to give them a 3-11 to 1-11 interval lead and ultimately victory after 77 minutes of entertaining hurling.
Kerry took an early two-point lead but Aaron Dunphy's seventh minute goal made it 1-2 to 0-3 for the visitors and they never trailed in the contest after that.
Within a minute of Dunphy's strike Ross King broke through for another close-range finish to make it 2-2 to 0-3, and when Stephen Maher (two frees) and King from play made it 2-5 to 0-3 by the 12th minute the 800 attendance feared for a Laois rout.
Padraig Boyle struck back with a great goal in the 13th minute and Kerry settled much better for the second quarter and they hurled their way back into the game with Boyle, Shane Conway and Michael O'Leary mining some crucial scores to keep the Kingdom in the hunt.
By the 25th minute Kerry were back to within three points of Laois but Paddy Purcell played in Neil Foyle who slipped the sliotar to the net off the goalkeeper's hurley as Laois took that six-point cushion to the break.
As they did in the first half, Kerry scored the first two points of the second to get within four but their defensive frailties betrayed them again when Laois midfielder Charles Dwyer crashed a fourth goal past John Brendan O'Halloran to make it 4-12 to 1-13 after 40 minutes.
Shane Conway converted two 65s but Laois iced the win in the 46th minute when Purcell smacked in a fifth goal for the Leinster men, and it was fairly academic thereafter with the sides just about splitting the last 11 points between them.
Laois host Westmeath next weekend in what looks like a dress rehearsal for the McDonagh Cup final a fortnight after that, while Kerry must sift the embers of this loss to find enough to regroup against Offaly in Tralee next Saturday with the loser heading down to the Christy Ring Cup for next year.
Kerry: J B O'Halloran, J O'Connor 0-01, B Murphy, S Weir, E Murphy, P Kelly, D Collins 0-01, D Goggin, T O'Connor, M O'Leary 0-02, S Conway 0-10 (0-06f, 0-03 '65'), J Goulding 0-01, P Boyle 1-05, M Boyle 0-01, C Harty.
Subs: J Buckley for E Murphy (28), J Conway for D Goggin (ht), M Slattery for C Harty (50)
Laois: E Rowland, J Phelan, M Whelan, D Hartnett, J Kelly 0-01, R Mullaney, P Delaney, J Lennon, C Dwyer 1-03, A Dunphy 1-03, W Dunphy 0-01, P Purcell 1-00, N Foyle 1-02, S Maher 0-06 (0-05f), R King 1-01.
Subs: S Bergin for R King (48), L Cleere for J Phelan (51), C Phelan for N Foyle (61), E Killeen for J Kelly (67), L Burke for P Delaney (70)
Referee: Johnny Murphy (Limerick)