Chelsea tore Liverpool apart with a four-star display to climb above their opponents into third place in the Premiership table.
Karlheinz Riedle got the visitors back on level terms in first-half injury time after Mark Hughes had fired Chelsea in front after 11 minutes.
But Roy Evans' side were dismantled by a three-goal burst in 11 second-half minutes as Gianluca Vialli's team proved they had not forgotten about the league after their European adventures.
Steve Clarke got on the scoresheet for the first time in six years with Chelsea's second, substitute Tore Andre Flo sprung the offside trap to score the third and Hughes rubbed salt into the wounds with a bicycle kick to round off the win 12 minutes from time.
It was all the home side deserved after dominating the first half only to allow Liverpool back into a game that should have been well beyond them early on.
Gianfranco Zola's cross after just two minutes exposed the Liverpool defence's aerial weakness and Brad Friedel had to be at his best to tip over Hughes' powerful header.
Graeme Le Saux then tested the American goalkeeper from long range before Hughes' shot was deflected off Dominic Matteo only to crash back off the crossbar with Friedel beaten - and all this in the first three minutes.
It looked only a matter of time before Chelsea opened the scoring and the goal duly arrived after 11 minutes.
Clarke's deep cross saw Hughes rise superbly above a static Liverpool defence and he gave Friedel with no chance with a thumping header.
That at least brought some response from the visitors, Riedle heading Rob Jones' cross over the bar, but it was to be a short respite and the hosts could have been well clear but for some profligate finishing.
The worst offence was committed by Zola. Put clean through by Dan Petrescu he tried to chip the advancing keeper but only succeeded in lobbing the ball weakly at Friedel.
The miss came at an even higher price, Zola limping off a minute later with what appeared a groin injury to be replaced by Flo.
The switch did little to affect Chelsea' rhythm, Hughes dragging a shot across the face of goal and Gustavo Poyet seeing his header from another deep Clarke cross well saved by Friedel, who also turned away a thunderous free-kick from Frank LeBoeuf.
But despite all Chelsea's chances it was Liverpool who got on the scoresheet with an equaliser just before the interval.
Dmitri Kharine could only parry Danny Murphy's low drive and Riedle was in the perfect place to slot into an empty net from five yards out.
The momentum had swung firmly Liverpool's way and after some no doubt harsh words from Evans at half-time they began the second period with much more desire and purpose, Kharine saving well from Riedle's low shot at the near post.
But Chelsea were determined not to let the game slip from their grasp, Poyet forcing an athletic save from Friedel before they found a way past the American keeper.
LeBoeuf's cross-cum shot across the area evaded Flo but fell kindly for Clarke, who controlled the ball well before firing in after 67 minutes.
That took the stuffing out of Liverpool and they were dead and buried just four minutes later. Flo sprung the offside trap to race on to Le Saux's through ball and despite a desperate lunge from Matteo the Norwegian striker kept his cool to drill the ball into the far corner.
Evans was meanwhile making three changes, David Thompson, Patrik Berger and Jason McAteer - making his first appearance since fracturing his leg - all coming on, but it was to little avail.
And Hughes grabbed his second goal of the game in spectacular fashion after 77 minutes with a trademark bicycle kick after Eddie Newton had flicked on Roberto Di Matteo's free-kick.
The Welsh international was substituted soon after and left the field to a standing ovation that was just reward for another tireless performance in Chelsea's cause.
Chelsea: Kharine, Petrescu (Charvet, 76), Leboeuf, Clarke, Poyet, Hughes (Nicholls, 81), Duberry, Le Saux, Di Matteo, Newton, Zola (Flo, 30).
Subs not used: Hitchcock, Morris.
Liverpool: Friedel, Jones, Babb, McManaman, Leonhardsen (McAteer, 76), Riedle (Thompson, 76), Ince, Bjornebye, Matteo, Carragher, Murphy (Berger, 72).
Subs not used: James, Kvarme.
Referee: G R Ashby (Worcester).
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