Manchester City's title hopes suffered a major blow as Liverpool gained some revenge for Sunday's League Cup final defeat with a deserved win at Anfield.
City edged the game at Wembley on penalties but were distinctly second best against a fired-up home side.
Adam Lallana's low drive gave Liverpool the lead before James Milner poked in a second against his former club.
Ex-Red Raheem Sterling was taken off at half-time before Roberto Firmino fired in a third to compound City's woes.
Man City are somewhat fortunate that leaders Leicester are the only one of their major title rivals to pick up a point in these midweek fixtures, but the defeat - their third in succession in the Premier League - means they are now 10 points behind Claudio Ranieri's side.