Liverpool deservedly won the 201st Merseyside derby against Everton and closed the gap to four points on their rivals for a Champions League place.
Steven Gerrard side-footed in a 20-yard set piece to give Liverpool the lead.
Luis Garcia nodded in a Reds second after keeper Nigel Martyn could only parry a Fernando Morientes shot on to his crossbar and into his six-yard box.
Milan Baros was sent-off for the home side before Everton's Tim Cahill rifled in a shot which proved to be in vain.
The match was billed as one of the most important derbies between the sides as they chased a Champions League spot and the much-needed finances qualification could yield.
Liverpool started promisingly but were forced into a reshuffle when left-back Stephen Warnock was forced off through injury shortly before taking the lead after 27 minutes.
Garcia played the second half even though he was badly injured
Garcia was fouled on the edge of the Everton area by Tony Hibbert and Gerrard caught Martyn out by going for placement rather than power after Dietmar Hamann touched the free-kick into his path.
Everton were determined to stop Liverpool getting into any kind of rhythm but the Anfield side did manage to produce flashes of the slick play and passing they have shown only intermittently this season.
And they extended their lead five minutes later when Morientes attempted a long range dipping shot which surprised Martyn, who fell into his net as he palmed the ball on to his crossbar.
The ball bounced into his six-yard box and Garcia nodded home.
Garcia was in the thick of the action and blazed over after Baros ended a surge on Everton's goal with a poor shot.
But Rafael Benitez's worries mounted when both Hamann and Morientes limped off injured.
A Lee Carsley free-kick went wide in Everton's only threat on goal in the opening half and David Moyes brought striker James Beattie on after the break to inject some urgency in their play.
The visitors could have been put out of the game before Beattie had a chance to have an impact when an Alan Stubbs slip left Baros with a clear run on goal.
The Czech forward's control let him down and allowed Hibbert to track back to clear before he fizzed a 25-yard half-volley just over and again spurned a one-on-one with Martyn.
The striker's misery was compounded when he was red carded for a late and high challenge on Stubbs.
Cahill powered in an angled shot from a Duncan Ferguson knock down to give Everton hope only for a desperate rearguard action to earn Liverpool the points.
Liverpool: Dudek, Finnan, Carragher, Pellegrino, Warnock (Nunez 21), Luis Garcia, Hamann (Biscan 40), Gerrard, Riise, Baros, Morientes (Smicer 43).
Subs Not Used: Hyypia, Carson.
Sent Off: Baros (77).
Goals: Gerrard 27, Luis Garcia 32.
Everton: Martyn, Hibbert, Stubbs, Weir, Pistone (Watson 84), Yobo (Beattie 45), Osman, Carsley, Cahill, Kilbane, Bent (Ferguson 55).
Subs Not Used: Wright, Naysmith.
Booked: Weir, Yobo, Osman, Hibbert.
Goals: Cahill 82.
Ref: R Styles (Hampshire).