Manchester City centre-back Nathan Ake headed in the winner as his side beat holders Liverpool 3-2 in a Carabao Cup thriller to reach the quarter-finals.
Despite not playing competitively for a month during the World Cup break, City and Liverpool returned to action at a ferocious pace as Fabio Carvalho (20) cancelled out Erling Haaland's (10) opener in a frantic start.
Riyad Mahrez nudged City back in front two minutes after the break but within 47 seconds Liverpool levelled through Mohamed Salah (48) after Darwin Nunez's cut-back following a rapid counter.
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But an unmarked Ake popped up at the back post to nod in the decisive goal (58) after Kevin De Bruyne's cross - his second assist of the night - to book City's place in the Carabao Cup quarter-finals and end the Reds' five-game unbeaten run in this fixture.
City were drawn to face Southampton in the quarter-finals after Thursday's win and will travel to St Mary's on January 10 or 11.
How City edged Liverpool in Carabao cracker
Liverpool almost conceded without touching the ball after the kick-off but were given a reprieve as Haaland showed signs of rustiness when through on goal by miscuing a chip.
Haaland took advantage of Virgil van Dijk's absence as Joel Matip and Joe Gomez struggled to cope with the City striker while keeping a high line. Haaland nearly set up Cole Palmer five minutes after his missed chance, but the youngster struggled to control his cut-back in a promising area.
Haaland made the most of Liverpool's slow start after 10 minutes when he sneaked in front of Gomez to meet De Bruyne's left-footed cross to prod City into the lead.
Liverpool were all at sea until Carvalho caressed in an equaliser from around the penalty spot. James Milner squared the ball to the 20-year-old after an incisive pass from Matip took five City players out of the game.
Both sides had chances to take the lead before the break but Caohmin Kelleher denied Ilkay Gundogan with a smart, low save while Liverpool's Darwin Nunez missed two chances.
City made an electric start to the second half as Mahrez found the back of the net after 47 minutes with a sublime first touch and finish, but Liverpool responded less than a minute later as Nunez set up Salah to equalise for a second time.
"What a game this has been," Sky Sports pundit Jamie Carragher said in co-commentary. "This match is summing up why the Premier League is the most watched league in world football.
"We've just watched the World Cup final which will go down as one of the best games a lot of us have ever seen. The first 49 minutes of this game and the first 49 minutes of the final - this game is streets ahead."
Liverpool were made to pay for slack defending around the hour mark as De Bruyne got the ball back from a short corner to find Ake free at the back post allowing the Netherlands defender to head in the winner.
Nunez was guilty of wasting another gilt-edged chance in the second half as his frustrating start to life in a Liverpool shirt continues beyond the World Cup break.
City can match Liverpool's record of nine Carabao Cup wins if they are successful in the competition this season.
Pep: De Bruyne has that fire; City lucky to have Lewis
Manchester City manager Pep Guardiola:
"After the World Cup and a long time of not playing, both teams were incredible with high level and intensity.
"Liverpool are so difficult, when they play good they destroy you. The quality of the transitions they do, they create chances. Big compliment for the players they played against that team. Otherwise, you don't play in this rhythm and the courage is impossible.
"It's true that the guys who came back after one week off, they lost a little bit but not much. It's more difficult for the players who were here and had time off like Erling Haaland and Cole Palmer. They were brilliant, intense and really good.
"Kevin played with a fire inside of him. He had to find it. What a player. How many years he's been coming here? Eight years? He's an absolute legend, he has the desire to find this fire.
"First half the Academy boys played really well. It's been a long time I've seen a performance like Rico Lewis, he's 17 or 18 years old. The way he played with and without the ball, we are lucky to have this player for the next decade. Hopefully, the club can take him, the game he played was exceptional."
Klopp: All City's goals were unnecessary
Liverpool manager Jurgen Klopp to Sky Sports:
"Difficult first 15 minutes us definitely. We played a formation we are not used to playing. In pre-season, we had Roberto Firmino in the centre, Alex Oxlade-Chamberlain on the wing which helps things. Then we had to change after the last session. You could see we needed time to adapt.
"When we were compact, we had our moments. They are a super, super, super side who do things extremely well. In midfield, you have to be really spot on. The first 15 minutes, we really struggled and that kills the confidence and the conviction.
"Good for half-time, all ok. Second half starts and they score second goal with first shot. It was world-class from Riyad Mahrez but we could have done more before that.
"The goals we conceded were all unnecessary. When you see the third goal, we changed before and that meant new organisation. We watched the ball. We all expect Nathan Ake to win that header, but behind that is nobody apart from two City players.
"The goals were unnecessary, the rest was a difficult game for both teams. We had good spells, played good football and could have scored more goals. It's a result we have to live with, that's it."
Mahrez: We've beaten Chelsea and Liverpool - who is left?
Manchester City winger Riyad Mahrez speaking to Sky Sports:
"It's always good to score to help the team to win. Overall, we were very good today and deserved to win.
"Everyone came back with a good mentality to start again. It was a tough opponent but we made the job and especially in the second half, after the third goal, we were good defensively. We stopped them getting a third so we are happy.
"I don't know who is left [in the competition] - we've beaten Chelsea and Liverpool, two top teams! We take it game by game and we focus on the next Premier League team."
Robertson: Tired legs didn't help us at the end
Liverpool defender Andy Roberston speaking to Sky Sports:
"We had chances, they had chances, it was quite an open game. I'm sure it was a good game for the neutral but for us it's disappointing to lose and go out of the cup.
"It was the first game back and I'm sure you could see there were some tired legs at the end there. When you're pushing to get an equaliser, that doesn't help.
"We pushed, we had some good chances. The game was decided on fine margins.
"When you come up against City, both teams raise their game and you can push yourself a bit further. A lot of people played the World Cup and there was a lot of emotion in that. A difficult game to start off and there are positives we can take but we wanted the win.
"Disappointing [to concede those goals], every one could have been stopped. The short corner and the first two. We have to be switched on and the goals are disappointing. We had two good goals from our point of view, they took their chances, we only took two.
"We don't have time to waste, especially in the league. Before the break, we picked up the results and we want to kickstart that. We are out of the cup, which is disappointing and you want to go for every trophy available to you.
"It will be a difficult game at Villa, new manager and they've started really well under him. We have to be ready."
What's next for Man City & Liverpool?
Manchester City resume their Premier League campaign with a trip to Leeds on December 28; kick-off 8pm.
Liverpool, meanwhile, face a trip to Aston Villa on Boxing Day; kick-off 5.30pm.