Goals from Richarlison and Gylfi Sigurdsson in each half were enough for Everton to secure their first derby victory at Anfield since 1999.
The result means that Liverpool suffered their fourth consecutive defeat in the league and fourth in a row at home.
Liverpool’s dismal day was compounded when they lost captain Jordan Henderson to injury in the first-half
Everton go level on points with Liverpool with both teams three points off the top four places but Everton have a game in hand.
Everton took the lead inside three minutes when James Rodriguez played a through ball to Richarlison who produced an emphatic finish.
Liverpool responded well and forced Jordan Pickford into two superb saves from Henderson and Trent Alexander-Arnoldrespectively.
The Liverpool captain then limped off just before the half an hour mark with an injury and was replaced with youngster Nathaniel Phillips.
Moments after the substitution, Everton had a great chance to double their lead but Seamus Coleman’s close-range header was saved by Alisson.
The hosts were livelier in the second half with Sadio Mane heading two crosses over the bar and then having a shot brilliantly blocked by Michael Keane.
Just before 70 minutes, Mohamed Salah was denied from close-range by another great Pickford save.
With eight minutes remaining, Dominic Calvert-Lewin was brought down by Alexander-Arnold inside the box and Sigurdsson converted the penalty to seal the win
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