Michael Owen blasted four goals in a senior game for the first time in his Liverpool career in response to being rested in midweek.
Liverpool, fearing burnt out, decided the 18-year-old England striker should start on the bench for the UEFA Cup clash with Valencia.
But Owen was restored to the starting line up at the expense of Robbie Fowler and took out his frustration on Forest.
Owen had scored only twice in 11 matches for club and country before today and the decision of Liverpool's joint managers Gerard Houllier and Roy Evans to give him a breather had looked a sound one.
But Owen insisted he was feeling fit and fresh and proved his point as he took Forest apart at Anfield. Owen has now plundered nine goals in 13 games this season and his Liverpool career record is 33 in 59 matches. Clearly his coaches should think about leaving him out more often if he reacts like this.
Forest started like men possessed but Liverpool were soon flowing forwards with Steve McManaman a constant danger. He almost worked a superb opening after Vegard Heggem and Patrik Berger combined to put him away down the left.
The warning signs were there for Forest when a Berger corner was headed inches wide by Paul Ince.
And Thierry Bonalair's blocked denied Karlheinz Riedle after Owen had got clear on the right and provided the cross.
Liverpool's pressure paid off on 10 minutes, Owen firing them ahead with a stunning goal. Ince won a ferocious tackle in midfield that left him in a heap clutching his leg. The ball broke to Riedle, whose pass left Owen in acres of space to clinically curl a right footed shot into the far top corner.
It was Owen's first home goal of the season, and helped to redress the balance of a so-called goal drought that had seen him net just two in his previous 11 club and international games.
But Anfield was stunned when Dougie Freedman grabbed an 18th-minute equaliser for Forest. Steve Stone forced his way to the byline and pulled the ball back superbly for Freedman to drill his shot past David James.
Forest were on level terms for only five minutes with McManaman scoring his first goal of the season to make it 2-1. Owen and Riedle were quick to pounce on a Steve Chettle error, and the ball was moved at high speed across the area for McManaman to crash the ball into the roof of the net.
Ince deceived Dave Beasant with a 34th-minute snapshot from 18 yards that almost crept inside the near post.
But it was Owen, back to his high speed best, who grabbed the third when he ghosted into space on the left to take a Riedle pass and calmly fire his shot across Beasant into the far bottom corner.
Owen almost scored again after 41 minutes, when Beasant spilled a searing Ince drive, but the Forest keeper managed to dive at the little forward's feet as he was closing in to punish the error.
Forest showed plenty of spirit but they were outclassed in the second half.
Owen was a constant threat, hovering on the shoulder of the last defender and flying into open space onto a multitude of through passes.
Forest conceded a fourth from the penalty spot in the 71st minute. Alan Rogers brought down Riedle and Owen made no mistake to complete his hat-trick.
Owen grabbed his fourth goal in the 77th minute. He collected a long throw from David James and sprinted from the half way line.
Dave Beasant parried the England striker's initial effort but Owen latched onto the rebound to drive a follow up shot home.
Liverpool: James, McAteer, Staunton, McManaman (Thompson 78), Owen, Riedle, Heggem, Berger, Ince, Bjornebye, Carragher.
Subs Not Used: Fowler, Harkness, Kvarme, Friedel.
Goals: Owen 10, McManaman 23, Owen 38, 71 pen, 77.
Nottm Forest: Beasant, Rogers, Chettle, Hjelde, Stone, Gemmill, Shipperley, Bart-Williams, Freedman, Armstrong, Bonalair.
Subs Not Used: Louis-Jean, Crossley, Lyttle, Gray, Harewood.
Goals: Freedman 18.
Ref: S Dunn (Bristol).
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