The victory at a festive Estadio Benito Villamarin in sunny Seville lifted Betis to fourth on 34 points with half the season played, three ahead of Andalusian rivals Malaga, who host unbeaten leaders Barcelona in the late kickoff (2000 GMT).
Castro set up Costa Rica forward Joel Campbell, on loan from English Premier League club Arsenal, to put Betis ahead in the seventh minute.
The 31-year-old Canary Islander netted his 11th league goal of the campaign just after the hour following a superb piece of close control on the edge of the area.
Betis beat Real Madrid 1-0 at the end of November and Sunday's win put them within three points of the stuttering champions, who had Kaka sent off and were held to a 0-0 draw at lowly Osasuna on Saturday.
Coached by the charismatic Pepe Mel, Betis last took part in European competition in 2005-06 when they finished third in their Champions League group behind Liverpool and Chelsea.
They were relegated in 2008-09 before winning promotion back to Spain's top flight two years later.
Valencia-based Levante, who have been drawn to play Greek side Olympiakos Piraeus in the Europa League last 32 when the competition resumes next month, are eighth on 30 points.