Skipper Ruairi Convery inspired Derry to a first appearance in the Christy Ring Cup final, claiming a seven-point haul as Down were put to the sword at Owenbeg.
Paul Cleary also turned on the style with six delightful scores from play, and the Oak Leafers appear to have a potent attacking unit that will trouble Kerry in next Saturday's Croke Park decider.
They conceded goals early in each half, but their capacity for swift recovery gave them the strength and confidence to stride to the finish line.
The winning margin could have been greater, but for the heroics of Down goalkeeper Stephen Keith, who saved the Mourne men from a heavier defeat, pulling off superb second-half saves from Patrick McCloskey and Jonathan O'Dwyer.
Down captain Gareth 'Magic' Johnson flicked home a ninth-minute goal, but the home side responded with scores from Convery, Cleary and Paddy Henry.
Late in the half, three long-range frees from Johnson, one a mammoth effort from 85 metres, eased Down into a 1-8 to 0-10 interval lead.
Johnson sent James Coyle through for a second Down goal in the 43rd minute, and the game was finely balanced, level on 10 occasions, right through to the final quarter.
But the Oak Leafers finished the stronger, striking quality points through Anton Rafferty, Convery and Alan Grant to pull clear, a tiring Down side fading towards the end.
Scorers - Derry: R Convery 0-7 (4fs), P Cleary 0-6, P Henry 0-5 (4fs), A Grant 0-3, P McCloskey, A Rafferty 0-1 each. Down: G Johnson 1-5 (0-3fs), J Coyle 1-1, S Dineen 0-2, F Conway, M Ennis, D McManus, S Nicholson 0-1 each.
Derry - D McDermott; M Warnock, C Quinn, S McCullagh; A Rafferty, C McSorley, K Hinphey; S McGuigan, B Quigley; P McCloskey, P Cleary, P Henry; A Kelly, R Convery, A Grant. Subs: J O'Dwyer for Kelly (53), L Hinphey for Quigley (58), N Ferris for McCloskey (64), D Flanagan for Kelly (64), R McCloskey for Warnock (71).
Down - S Keith; M Conlan, P Flynn, M Hughes; D McManus, C Woods, M McCullough; D Hughes, F Conway; M Ennis, D Toner, S Dineen; C Egan, G Johnson, J Coyle. Subs: J McManus for Egan (18), S Nicholson for Hughes (h-t), B Nicholson for Woods (53), P Sheehan for Toner (59), E Sands for Coyle (64)
Ref - O Elliot (Antrim).