Jamie Redknapp rescued Liverpool with a dramatic last-ditch free-kick when it looked like Chelsea were on their way to sweet revenge.
The Blues had suffered cruelly at Anfield in the past two seasons, losing 4-2 and 5-1.
But for much of the game the Londoners had been the masters only for Liverpool to mount a comeback driven more by sheer belligerence than quality football.
In the outstanding Redknapp, Liverpool had the one player whose skill, passing ability and shooting could turn any game.
Co-boss Gerard Houllier has set the England midfielder a 15-goal target for the season, particularly after the two he got in midweek UEFA Cup action against Kosice. And today he came up with a face-saving goal to take his total to four in nine games this term, showing he is taking the French coach's words to heart.
Liverpool had been outplayed in the first half and gone in one down when Pierluigi Casiraghi scored his first goal since his club record £5.4million move in the summer. The 29-year-old Italian had not managed a goal since netting in Serie A for Lazio in February.
But Liverpool's uncertainty stems from the back. American keeper Brad Friedel was dumped for getting the jitters at Manchester United, but nobody can say that David James' return has done anything to improve matters.
Liverpool fielded the side that beat Kosice 5-0, which meant James played his first Premiership game since February.
Chelsea made four changes from the team that progressed in the Cup Winners' Cup on Thursday against Helsingborg, bringing in Gianfranco Zola, Brian Laudrup, Dan Petrescu and Casiraghi.
Chelsea's first half display was impressive. Flowing soccer, with the interchanging of Laudrup and Zola plus the intelligent play of Marcel Desailly causing problems for Liverpool all over the park.
The warning signs for the home side were there when Frank Leboeuf launched a 40-yard pass into the path of the hard-running Desailly, but the Frenchman lost control at the crucial moment.
But after 10 minutes the same tactic produced Chelsea's goal. Oyvind Leonhardsen and Robbie Fowler closed Graeme Le Saux down on the touchline, and the ball clearly bounced off the England full-back and out for a throw.
But it was awarded to Chelsea, and quickly taken by Zola, who found Roberto Di Matteo in the centre circle.
The ball was again launched down the inside left channel, and Casiraghi cruised into possession, took the ball round the onrushing James and calmly angled the ball into an empty net.
Phil Babb injured himself colliding with a post as he tried to scoop the ball away. The Irishman last just two more minutes before he was replaced by Dominic Matteo, clearly hampered by the injury.
But Chelsea were being pushed back, with Redknapp and Leonhardsen working hard to turn the tide.
Paul Ince got himself booked for clattering Laudrup, and then Fowler had a 20-yard shot that dipped just over and then a snap-shot on the turn from Jason McAteer's cross that cleared the bar.
Redknapp's swerving 25-yard free-kick flashed inches wide before Liverpool dominated the second period, but without creating much in the box.
Casiraghi was warned by referee Graham Poll for pushing his hands into Matteo's face after a clearance, and a few minutes later the Liverpool man took his own revenge with a tackle from behind that earned him a booking.
Redknapp was still Liverpool's best bet of a breakthrough, and he lashed one 20-yard shot just over, before - to great acclaim from the home fans - Vegard Heggem came on as substitute for McAteer. The Norwegian has made a great impact at right-back since his summer move, and many were surprised when he lost his place to the Irishman.
Chelsea opted to stiffen their midfield by taking off Zola, and sending Gustavo Poyet into the fray after 60 minutes.
Liverpool went for the extra attacker by taking off Leonhardsen and sending Karlheinz Riedle into action after 64 minutes.
Within seconds of coming on, Riedle went down in the box after a Leboeuf tackle, and amid frantic claims for a penalty, the German was booked for diving.
Michael Duberry was next into Poll's book for a foul on Fowler, but the extra space Chelsea were finding at this point against a weakened Liverpool midfield saw them able to play clever possession football as the home side's fire was slowly being diminished.
But that man Redknapp rekindled the flames with the equaliser after 83 minutes after Duberry had brought down Fowler. Redknapp stepped up to drive the free-kick through the wall and past an unsighted Ed De Goey.
It was desperate, frantic stuff at both ends thereafter and the fact that Liverpool had bludgeoned their way back into a game they had for long spells been outplayed in, made for a tremendously exciting finale.
Liverpool: James, McAteer (Heggem 56), Carragher, Babb (Matteo 24), Bjornebye, Leonhardsen (Riedle 64), Redknapp, Ince, Berger, Fowler, Owen.
Subs Not Used: Staunton, Friedel.
Booked: Babb, Ince, Redknapp, Matteo, Riedle.
Goals: Redknapp 83.
Chelsea: De Goey, Petrescu, Leboeuf, Desailly, Laudrup (Lambourde 90), Casiraghi (Flo 69), Duberry, Le Saux, Di Matteo, Ferrer, Zola (Poyet 60).
Subs Not Used: Hitchcock, Newton.
Booked: Petrescu, Duberry.
Goals: Casiraghi 10.
Ref: G Poll (Tring).
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