Brendan Rodgers' men knew only a victory would suffice at Selhurst Park after City, who now sit one point behind Liverpool with a game in hand, edged to a seemingly crucial 3-2 triumph at Everton on Saturday. That result left City, who wrap up their season with home games versus Aston Villa and West Ham this week, at the summit thanks to goal difference.
And for large parts of the game against Palace, it appeared merely a question of how much Liverpool could eat into City's nine-goal lead after Daniel Sturridge and Luis Suarez added to Joe Allen's first league goal for the club.
But having been cruising at 3-0 after 55 minutes, Liverpool had to endure a chastening finish as Damien Delaney's 79th-minute deflected strike was immediately added to when Dwight Gayle capped a smart counter-attack with a cool finish two minutes later.
Palace were to rue their failure to heed the lesson from Steven Gerrard's first corner as they conceded via a set-piece for the first time under Tony Pulis two minutes later.
Jason Puncheon forced a good save from Simon Mignolet with a powerful effort from distance. The Belgian goalkeeper had to be on a high alert again moments later, producing an even better save when turning Mile Jedinak's thunderbolt over.
Any momentum Pulis' men had built before the break was quickly extinguished afterwards as Liverpool attacked with verve.
Sturridge was the main threat, seeing an effort tipped on to the post by Speroni before strike partner Suarez, rumoured to be playing despite illness and having added the Football Writers' Player of the Year award to the PFA gong earlier in the day, uncharacteristically fired over with the goal gaping.
Delaney was the first to strike, his pot-shot taking a wicked deflection and beating Mignolet. Suddenly Palace had hope, which was only added to as Bolasie surged forward on the break and slid in Gayle - who made no mistake.
