Manchester City have moved up to second place and are now within four points of leaders Liverpool, after a 2-1 win at the Etihad Stadium.
Leroy Sane was the hero for City, with his strike in the 72nd minute ending Liverpool's unbeaten run in the Premier League.
Sergio Aguero had put the champions in front with a splendid finish, but Roberto Firmino's header pulled the game back for the Reds.
With just over half of the season remaining, City are now four points behind Liverpool.
How it Happened
The tempo right from the start was frightening, really, with both sides predictably going at it with everything they had.
The first big chance of the game went to the visitors, when Sadio Mane was put through by Mo Salah, but the Senegal winger hit the post before a mix-up in the City defence led to the ball hitting Ederson and heading towards the goal. Goal-line techology was called upon and the ball was just over 1cm away from being a goal. Fine margins.
Liverpool's front line, including the midfielders usually have so much joy from pouncing on teams when they play it out from the defence. Not City, though. They did it with such assurance and class that the Reds' strongest attribute was very minimised.
However, the one time they did win the ball back, when Salah was lurking, he was brought down by Vincent Kompany and referee Anthony Taylor brandished the City skipper a yellow card. Jurgen Klopp was furious at the time and even more so after the match that City weren't reduced to 10 men (see bottom of page).
City eventually took the lead after some good work from Bernardo Silva, when his low driven cross found Aguero, who skipped away from Dejan Lovren before smashing it beyond Alisson from an incredibly tight angle. Great finish, and an overall deserved lead for City.
After the restart, something had to change for the Reds and Klopp called upon Fabinho, who replaced James Milner, not too long into the second-half. The system change saw Salah move into the centre with Firmino; what we've become accustomed to in recent games. It worked as well.
A brilliant cross from Trent Alexander-Arnold picked out fellow full-back Andrew Robertson, whose excellent volleyed-cross found Firmino who headed home with ease. It seemed Liverpool had finally marked their authority in this game... but it wasn't to be.
Some positive running from the brilliant Raheem Sterling led to the former Liverpool winger finding Sane with a fine pass and the German winger smashed the ball across goal, past Alisson, in off the post and it was advantage to the champions yet again.
Liverpool pressed and pressed with Virgil van Dijk effectively playing as a striker for the last few minutes, with the Reds desperate for anything from the match. But it wasn't meant to be. The City defence performed excellently to keep the Liverpool frontline somewhat quiet.
The Managers
Manchester City boss Pep Guardiola: "I am proud of them, but not just for today. We lost two games in four days but you cannot forget what they have done for 16 months. We knew that it was a final today; if we lose it is almost over.
"All credit to these incredible players. That is how we have to play in the Champions League. Both teams tried to search for each other, we were not scared, we had no fear and we had a lot of pressure.
"They are leaders, it is four points but we have reduced the gap. We knew that if we won we would be in contention to fight for the Premier League title, if we lose, it is over.
"I don't remember a league so tough, there are so many huge contenders fighting for the title. Every game is a final."
Liverpool manager Jurgen Klopp: "It was a big pressure. Very intense game. We were unlucky in our finishing moments. Unluckier than City I would say.
"They had periods where they dominated the game and everybody felt the intensity. But we came back and had big chances. It is always like this. You have to score in those moments. When Aguero scores there is no angle. In similar situations, we didn't score/
"It was not our or City's best game because we both made it difficult for the other team. I have already said to the boys this is OK. We lost it but it will happen. Tonight it is not nice but it is not the biggest problem."
On Kompany's challenge on Salah, Klopp said: "I really like Vincent Kompany; but how on earth is that not a red card?! He is last man and he goes in. If he hits Mo more, he is out for the season! It is not easy for the ref and he may not see it how I see it."