Robbie Fowler's quick-fire second half double confirmed struggling Ipswich's sixth consecutive defeat after a John Barnes special put Liverpool in the driving seat at Portman Road.
England comeback man Barnes delivered a superb 25-yard shot six minutes before half-time after Liverpool took a grip on their hosts' surprisingly sprightly opening.
And Fowler, the young striker who may soon succeed Barnes in the full international line-up, wrapped up the points with two goals in three minutes just before the hour mark.
Ipswich had tested the Merseysiders' 9 million pound three-man central defence early on with the lively but lightweight combination of Bulgarian Bontcho Guentchev and Uruguayan Adrian Paz.
But it was not until Liverpool had coasted three goals ahead that Paz was rewarded with his first goal for the Suffolk club, a well struck low drive from Mick Stockwell's perceptive through pass in the 65th minute.
Ipswich, without their former Liverpool veteran John Wark - their only scorer in the previous four matches - made a fight of it but Stockwell drove his shot straight at 'keeper David James when he had the chance to further reduce the deficit.
However, Roy Evans' team had been comfortably in command from the 18th minute when a Rob Jones drive came back off the post.
It was the prelude to a battering spell by Liverpool and the Ipswich goal was fortunate enough to survive near misses by Fowler, Ian Rush and the lively Steve McManaman.
Barnes' blast, after a link-up between Jamie Redknapp and Rush, broke the deadlock and then Fowler took his goal tally for the season to 13 with a glorious one-two between the 57th and 60th minutes.
McManaman's run and Rush's shot, beaten out by goalkeeper Craig Forrest, led to his first ... a simple tap-in.
Then Fowler sprinted through the middle after Stig Bjornebye beat Steve McManaman to flight a splendid through-ball which Fowler firmly despatched into the top corner.
Paz's strike six minutes later revived a brave Ipswich effort, but Liverpool regrouped to retain the advantage.
The situation at the bottom of the Premier League is now looking decidedly insecure for John Lyall's team who have dodged relegation by the skin of their teeth for the last two seasons.
Liverpool manager Roy Evans revealed that striker Fowler will sign a new four-year contract.
But although Evans praised Fowler's "priceless" ability to score "goals out of nothing", he was scathing about his defence, which almost let Ipswich back into the game.
"The system of three central defenders is one that I like, but sometimes today the players made it look as if it has come from a different planet. I know people might say I'm being over-critical, but we could have won by six goals today and instead we got very sloppy in the end. A 3-1 win away from home is always good, but we should have finished off Ipswich when we were three up. That's what we have got to do in games like this if we want to chase the championship or qualify for places in Europe."
Ipswich player-coach Wark said: "McManaman is on fire at the moment and it would have been a test for anybody, not just young Tony Vaughan on his home debut. We've got to try a few different things to get ourselves out of this run, but it is too early to talk about a crisis. There are still 30-odd games to go and it is not yet November. Little Adrian Paz did a great job for us today and deserved his first goal for the club."
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