Ademola Lookman came off the bench to consign Liverpool to a shock 1-0 defeat at Leicester after Mohamed Salah had a penalty saved.
It was a miserable night for Jurgen Klopp's side as they failed to close the six-point gap to Premier League leaders Manchester City and their wastefulness was to blame.
Salah's first-half penalty was saved by the brilliant Kasper Schmeichel but he did not test the goalkeeper from the rebound and nor did Sadio Mane when through after the break.
Lookman punished Liverpool with a fine goal just before the hour mark and Brendan Rodgers' depleted side held on for a memorable win that moves them back up to ninth.
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How Leicester upset the odds
There was a high tempo from the outset with Liverpool pushing and Leicester's obvious counter-attacking threat more than enough to encourage the home support.
But the electric atmosphere looked set to be taken down a notch when Wilfred Ndidi, playing at centre-back, caught Salah inside the box and the Egyptian stood over the penalty.
Schmeichel was up to the challenge though, saving Salah's tame penalty before the Premier League's top scorer somehow contrived to head against the bar from the rebound.
Salah had scored 15 consecutive Premier League penalties before this miss - a record only bettered by Matt Le Tissier - but this one was too safe in terms of height and direction.
The home supporters cheered as loudly as if they had scored themselves but Liverpool continued to push, Schmeichel called into action again to keep out Jordan Henderson.
By the midway point of the first half, it felt like Leicester were at their absolute limit in trying to repel the constant Liverpool attacks with Diogo Jota looking a particular menace.
Salah seemed certain to have made amends for his failure from the spot but Schmeichel proved his nemesis once more - hooking the ball away, a better stop than the penalty.
It was a heroic effort from the Leicester skipper and proved a turning point in the game as James Maddison finally managed to get on the ball and make things happen for his team.
Some neat play from a throw-in helped set up Jamie Vardy for a chance on the angle before Ndidi's tackle on Salah - roared on by the crowd - sparked another opening soon after.
It broke up the prolonged pressure from Liverpool, getting Leicester to the interval with their clean sheet intact and with the supporters still hoping for an unlikely victory.
Ten minutes into the second half, those hopes looked set to be dashed when Jota put Mane through one-on-one but the Liverpool forward inexplicably missed the target.
It proved costly when Lookman came off the bench, promptly exchanged passes with Kiernan Dewsbury-Hall, and beat Alisson at his near post. The home crowd erupted.
Liverpool were rattled but soon redoubled their efforts as Leicester inevitably began to drop a little deeper and looked to protect their lead. Maddison went off with an injury.
But while Klopp threw more attacking players on, Leicester held firm with Liverpool struggling to build up any momentum as the clock continued to tick down.
In the final moments, they did ask questions, Jota and Joel Matip both headed wide, with Alisson even going up for a late corner, but Leicester held on for the points.
It was some revenge for their Carabao Cup elimination last week and a welcome boost after conceding six to Manchester City. Those contrasting results leave Liverpool six points back from City, who can extend that gap to nine points when they face Brentford on Wednesday.
What the managers said…
Leicester boss Brendan Rodgers: "The players put in a heroic effort when you think of the recovery time against a team with so much power and athleticism. You don't keep a clean sheet against Liverpool if everyone isn't working. But it was the context of it after playing against Manchester City.
"We played a diamond for an hour to keep the threat in the side and then switched to 4-3-3 and showed resilience. [Kiernan Dewsbury-Hall's] energy is remarkable and we needed that in the team. Him and Hamza [Choudhury] had to put in so much work.
"I just thought, you know, let's go back to basics [with our set-piece defending]. An old school structure. Let's defend properly. We did that tonight. The centre-halves were amazing but they all played their part. Collectively, we did really well."
Liverpool manager Jurgen Klopp: "We were just not really ourselves tonight. I think we started OK. I didn't like 100 per cent the intensity even at the beginning.
"We forced it a little bit too early, we crossed it a bit too early instead of taking the extra pass. For some reason it did not click tonight. We were pushing but did not use the chances, missed free headers, all these things. In the end, I thought they deserved it.
"I know it is easy to say but if we had won the game 2-1 I would not have liked the game anyway. Tonight, I did not like a lot in our football game. That is not cool. We have to do better, improve and go again."
Analysis: Liverpool pay price for wastefulness
Liverpool supporters will forgive Mohamed Salah for his error from the penalty spot given his astonishing record for the club but it will be a source of regret that it should prove such a costly miss. It was a night of them for Jurgen Klopp's side when slips are not an option.
Manchester City have won their last nine Premier League games so Liverpool need to be perfect. Instead, as well as Salah's shock failure from 12 yards, there was the sight of Sadio Mane, put clean through by Diogo Jota, directing his effort over the top of the bar.
Mane, now 29, has failed to find the net in his last nine appearances for Liverpool in all competitions. It is the sort of form that could prove the difference between winning the title and falling just short when the quality of the team's rivals is so high.
Liverpool can sometimes seem like such a finely-tuned machine that any cog out of place means they do not function quite as they should. Kostas Tsimikas was perhaps the obvious example at Leicester. He threatened. Some would say he played well.
But he was the man with the space, the player with the room to punish Leicester, who started with a narrow midfield. He got forward, of course he did. But the crosses were not quite in the right spot. The decision-making in possession rarely exactly what was required.
In short, Andrew Robertson, serving a suspension following his red card against Tottenham, was missed. The margins were fine and Klopp is entitled to feel that Liverpool did enough to win. But the little things went against them - and the consequences could be big come May.
Opta stats
- Liverpool failed to score for the first time in 29 Premier League games, and for the first time since a 1-0 home loss to Fulham in March.
- Liverpool ended 2021 in the same way they started it, failing to score in an away match. The Reds had netted in each of their last 28 on the road in all competitions between these two games.
- Ademola Lookman has scored in consecutive Premier League appearances for the first time in his career, with the attacker netting against Manchester City and Liverpool.
- Since the start of 2020, Kasper Schmeichel has saved more penalties in the Premier League than any other goalkeeper, with tonight's stop his third in this period.
- Mohamed Salah missed only his second ever penalty in the Premier League. He had scored each of his previous 15 attempts from the spot before tonight.
What's next?
Leicester are back in action at the King Power Stadium on New Year's Day - this Saturday for those losing track of the days - when they host bottom club Norwich City.
Liverpool's next game is the following day when they travel to Stamford Bridge to take on title rivals Chelsea in what will be a huge Super Sunday game live on Sky Sports.