Mark Noble's injury-time penalty gave West Ham a deserved victory over Liverpool at Upton Park.
Noble slotted the ball low past Pepe Reina with virtually the last kick of the match after Jamie Carragher had brought down Freddie Ljungberg.
Earlier, West Ham's Luis Boa Morte twice missed from six yards out while Xabi Alonso headed on to his own bar.
Lucas Leiva missed from eight yards for the Reds while Fernando Torres' shot was saved by Robert Green.
The result must have buoyed West Ham boss Alan Curbishley whose best-laid plans to frustrate Liverpool did not go awry.
Although the Reds had not won in the league for over a month they had beaten the Hammers in their last seven meetings.
But from the first whistle, the home side were intent to bring an end to their appalling record against the Merseysiders and even steal a win themselves.
They had the best two chances of the first 45 with Boa Morte blazing over from six yards and Alonso coming close to heading the ball into his own goal - the crossbar denying Curbishley's troops.
The closest Rafa Benitez's men came to grabbing the lead was inside the first 10 minutes when former West Ham player Yossi Benayoun burst into the area but fired his shot over the bar from eight yards.
Liverpool's multi-million pound strikeforce of Dirk Kuyt and Torres were often crowded out as soon as the ball arrived at their feet by the dynamic duo of Anton Ferdinand and Matthew Upson.
The defensive pair along with the rest of the backline and midfield worked tirelessly over the 90 minutes to deny playmakers Steven Gerrard and Alonso much time to weave their magic.
After the break, the visitors from Anfield should have been made to pay again for their lack of bite when Boa Morte received the ball on the edge of the six-yard area but completely mis-hit his effort embarrassingly wide.
That was enough for a bemused Benitez who brought on Leiva and Ryan Babel to insert some life into his side.
The Brazilian made a brief impression on the match, shooting narrowly wide from Torres' low right-wing cross, while Babel found Torres with a short pass only to see the Spaniard's effort saved low by Green - although it appeared to be heading wide.
The match was veering towards a draw until one of the stars of the show, Ljungberg, motored into the area only to have his ankle clipped by Carragher.
Referee Alan Wiley was left with a no-brainer and pointed to the spot.
England Under-21 star Noble, who had an exceptional match, was left with the pressure kick but showed no nerves to fire sweetly into Reina's left corner.
· West Ham boss Alan Curbishley: "It's tremendous - if you're going to get a penalty and score then it's a great time to do it.
"Week in and week out we've put in a lot of effort - the squad have a fantastic attitude and full credit goes to them.
"We've lost three games in the last 16 and that's gone unnoticed."
· Liverpool manager Rafa Benitez: "We had chances but couldn¿t take them.
"We started really well and in the second half we had a lot of possession and to lose following a counter attack in the final minute is disappointing.
"For them to score from a penalty so late on was terrible. We now need to think about the next game."
West Ham: Green, Neill, Ferdinand, Upson, McCartney, Ljungberg, Noble, Mullins, Bowyer (Ashton 58), Boa Morte (Etherington 59), Cole (Spector 81).Subs Not Used: Wright, Solano.
Goals: Noble 90 pen.
Liverpool: Reina, Finnan, Carragher, Hyypia, Aurelio, Benayoun (Babel 72), Gerrard, Alonso, Kewell (Lucas 61), Torres, Kuyt.Subs Not Used: Itandje, Crouch, Skrtel.
Booked: Aurelio, Torres, Alonso.
Att: 34,977
Ref: Alan Wiley (Staffordshire).
Noble slotted the ball low past Pepe Reina with virtually the last kick of the match after Jamie Carragher had brought down Freddie Ljungberg.
Earlier, West Ham's Luis Boa Morte twice missed from six yards out while Xabi Alonso headed on to his own bar.
Lucas Leiva missed from eight yards for the Reds while Fernando Torres' shot was saved by Robert Green.
The result must have buoyed West Ham boss Alan Curbishley whose best-laid plans to frustrate Liverpool did not go awry.
Although the Reds had not won in the league for over a month they had beaten the Hammers in their last seven meetings.
But from the first whistle, the home side were intent to bring an end to their appalling record against the Merseysiders and even steal a win themselves.
They had the best two chances of the first 45 with Boa Morte blazing over from six yards and Alonso coming close to heading the ball into his own goal - the crossbar denying Curbishley's troops.
The closest Rafa Benitez's men came to grabbing the lead was inside the first 10 minutes when former West Ham player Yossi Benayoun burst into the area but fired his shot over the bar from eight yards.
Liverpool's multi-million pound strikeforce of Dirk Kuyt and Torres were often crowded out as soon as the ball arrived at their feet by the dynamic duo of Anton Ferdinand and Matthew Upson.
The defensive pair along with the rest of the backline and midfield worked tirelessly over the 90 minutes to deny playmakers Steven Gerrard and Alonso much time to weave their magic.
After the break, the visitors from Anfield should have been made to pay again for their lack of bite when Boa Morte received the ball on the edge of the six-yard area but completely mis-hit his effort embarrassingly wide.
That was enough for a bemused Benitez who brought on Leiva and Ryan Babel to insert some life into his side.
The Brazilian made a brief impression on the match, shooting narrowly wide from Torres' low right-wing cross, while Babel found Torres with a short pass only to see the Spaniard's effort saved low by Green - although it appeared to be heading wide.
The match was veering towards a draw until one of the stars of the show, Ljungberg, motored into the area only to have his ankle clipped by Carragher.
Referee Alan Wiley was left with a no-brainer and pointed to the spot.
England Under-21 star Noble, who had an exceptional match, was left with the pressure kick but showed no nerves to fire sweetly into Reina's left corner.
· West Ham boss Alan Curbishley: "It's tremendous - if you're going to get a penalty and score then it's a great time to do it.
"Week in and week out we've put in a lot of effort - the squad have a fantastic attitude and full credit goes to them.
"We've lost three games in the last 16 and that's gone unnoticed."
· Liverpool manager Rafa Benitez: "We had chances but couldn¿t take them.
"We started really well and in the second half we had a lot of possession and to lose following a counter attack in the final minute is disappointing.
"For them to score from a penalty so late on was terrible. We now need to think about the next game."
West Ham: Green, Neill, Ferdinand, Upson, McCartney, Ljungberg, Noble, Mullins, Bowyer (Ashton 58), Boa Morte (Etherington 59), Cole (Spector 81).Subs Not Used: Wright, Solano.
Goals: Noble 90 pen.
Liverpool: Reina, Finnan, Carragher, Hyypia, Aurelio, Benayoun (Babel 72), Gerrard, Alonso, Kewell (Lucas 61), Torres, Kuyt.Subs Not Used: Itandje, Crouch, Skrtel.
Booked: Aurelio, Torres, Alonso.
Att: 34,977
Ref: Alan Wiley (Staffordshire).