Two Papiss Cisse goals maintained Newcastle's pursuit of a European place and extended 10-man Liverpool's recent Premier League misery.
Cisse headed in Hatem Ben Arfa's cross in the first half before tapping in from Demba Ba's centre after the break.
A poor afternoon for the visitors, who had Andy Carroll booked for diving against his former club, was made worse when goalkeeper Pepe Reina saw red.
They have now lost six of their last seven Premier League games.
Reina's dismissal came in the 82nd minute when, in collecting a Mike Williamson header, he was fouled by James Perch.
But when the Spaniard squared up to the Newcastle defender, leading with his head, referee Martin Atkinson had little choice but to send him off.
Alan Pardew praises 'special' Cisse and Ben Arfa
Reina, who had played 183 consecutive league matches for the Reds, will now miss the next three games, including the FA Cup semi-final against Everton on 14 April.
Kenny Dalglish's side remain eighth in the Premier League, while Newcastle move level on points with fifth-placed Chelsea as they search for tangible reward from a season of remarkable evolution.
That Cisse was on target again to take his tally to seven in eight appearances was unsurprising, such has been his impact since joining from Freiburg for £9m in January.
It further illustrated the current gulf between the Senegalese and the man who used to wear the Newcastle number nine shirt.
Jonathan PearceBBC Match of the Day commentator
This was an eighth Premier League defeat since the turn of the year for Liverpool. It was a very poor day for them after having Andy Carroll booked for diving and Pepe Reina sent off. Newcastle's victory was deserved and they're keeping up the pressure on the teams above them for a Champions League spot.
Carroll - like Jose Enrique, making his first return to Tyneside since signing for Liverpool last year - was booed by the Newcastle supporters from the kick-off and sarcastically cheered when substituted later on.
And he did not improve his relations with the home faithful when he was booked for rounding goalkeeper Tim Krul and falling to the ground with the goal at his mercy.
The £35m striker, who has scored eight goals since his January 2011 move, was then left further frustrated when he headed off target later in the first period.
Craig Bellamy's deflected cross also clipped the bar and Liverpool had a valid penalty appeal when Danny Simpson, on the goal-line, blocked Williamson's inadvertent header with his arm.
But those attempts were overshadowed when Cisse cleverly headed back across goal and inside the far post to finish off great trickery by Ben Arfa.
In keeping with a superb season, built on some new-found talents which have graced the Premier League, the goal gave Newcastle added confidence on the ball.
Cisse headed just wide from Danny Guthrie's centre before half-time with Willamson hitting a post after the break.
Frustrations got better of us - Dalglish
But once again Liverpool, who have won just two Premier League games in 2012, understandably looked short on belief in front of goal.
Jonjo Shelvey, making his second league start of the season, shot at Krul, while Perch cleared Luis Suarez's goalbound shot after Krul misjudged Enrique's cross.
The Reds went further behind when Ben Arfa linked with Ba and, despite the Frenchman failing to make contact with the return ball, Cisse tucked in at the back post.
And Reina's dismissal summed up a disappointing afternoon, with Enrique replacing the keeper in goal because Liverpool had used up all of their substitutions.
James Perch gives away a free kick for an unfair challenge on Luis Suarez. Steven Gerrard crosses the ball in from the free kick, clearance made by James Perch.
Shola Ameobi delivers the ball, Jon Flanagan makes a clearance.
Dirk Kuyt is caught offside. Tim Krul takes the free kick.
Substitution Hatem Ben Arfa goes off and Davide Santon comes on.
Short corner taken by Luis Suarez from the right by-line.
Unfair challenge on Luis Suarez by Jonas Gutierrez results in a free kick. Free kick crossed right-footed by Luis Suarez from right wing, clearance made by Cheick Tiote.
Free kick awarded for a foul by Shola Ameobi on Jay Spearing. Martin Skrtel restarts play with the free kick.
Inswinging corner taken by Stewart Downing from the right by-line.
Dismissal The referee shows Jose Reina a red card.
Booking James Perch is shown a yellow card.
James Perch challenges Jose Reina unfairly and gives away a free kick. Indirect free kick taken by Sanchez Jose Enrique.
Dan Gosling sends in a cross, Mike Williamson takes a shot. Save made by Jose Reina.
Martin Skrtel concedes a free kick for a foul on Shola Ameobi. The free kick is delivered right-footed by Yohan Cabaye from left wing.
Indirect free kick taken by Tim Krul.
Substitution Jordan Henderson on for Craig Bellamy.
Substitution Dirk Kuyt on for Andy Carroll.
Luis Suarez is ruled offside.
Steven Gerrard produces a drilled right-footed shot from 20 yards. Blocked by Mike Williamson.
Jon Flanagan delivers the ball, Andy Carroll takes a shot from 18 yards. James Perch gets a block in.
The ball is crossed by Hatem Ben Arfa, Jamie Carragher manages to make a clearance.
A cross is delivered by Danny Simpson, clearance made by Martin Skrtel.
Substitution Jonjo Shelvey goes off and Stewart Downing comes on.
Substitution Papiss Cisse leaves the field to be replaced by Shola Ameobi.
Steven Gerrard crosses the ball, save made by Tim Krul.
Free kick awarded for a foul by Papiss Cisse on Martin Skrtel. Free kick taken by Martin Skrtel.
The assistant referee signals for offside against Papiss Cisse. Jose Reina takes the free kick.
Luis Suarez delivers the ball.
Andy Carroll delivers the ball, clearance made by Mike Williamson.
Demba Ba has a drilled shot. Blocked by Martin Skrtel.
Indirect free kick taken by Tim Krul.
Substitution Dan Gosling on for Danny Guthrie.
Andy Carroll is ruled offside.
Luis Suarez takes a shot. James Perch gets a block in. Luis Suarez takes the outswinging corner, Shot by Martin Skrtel from 18 yards. James Perch gets a block in.
Assist on the goal came from Hatem Ben Arfa.
58:45 Goal scored
Goal! - Papiss Cisse - Newcastle 2 - 0 Liverpool Papiss Cisse finds the back of the net with a goal from inside the six-yard box to the bottom left corner of the goal. Newcastle 2-0 Liverpool.
Shot from 20 yards by Jonjo Shelvey. Save by Tim Krul.
The ball is sent over by Steven Gerrard, Tim Krul makes a save.
Martin Skrtel concedes a free kick for a foul on Papiss Cisse. Free kick taken by Cheick Tiote.
A cross is delivered by Steven Gerrard, Mike Williamson makes a clearance.
Free kick awarded for an unfair challenge on James Perch by Craig Bellamy. Indirect free kick taken by Tim Krul.
Martin Skrtel takes the free kick.
Booking Cheick Tiote goes into the referee's book for unsporting behaviour.
Free kick awarded for an unfair challenge on Jon Flanagan by Cheick Tiote.
The ball is sent over by Danny Guthrie, Header from inside the area by Mike Williamson bounces off the post.
Jon Flanagan concedes a free kick for a foul on Demba Ba. Free kick crossed by Yohan Cabaye, clearance made by Martin Skrtel.
The ball is delivered by Andy Carroll, Mike Williamson manages to make a clearance.
The second half kicks off.
45:00 +2:13 Half time
Half Time The first half comes to an end.
The assistant referee flags for offside against Steven Gerrard. Tim Krul restarts play with the free kick.
Tim Krul takes the indirect free kick.
Booking The referee shows Jon Flanagan a yellow card.
Foul by Jon Flanagan on Cheick Tiote, free kick awarded.
Danny Guthrie takes a shot. Jamie Carragher gets a block in. Papiss Cisse is caught offside. Jose Reina restarts play with the free kick.
Craig Bellamy is caught offside. Tim Krul restarts play with the free kick.
Danny Guthrie crosses the ball, Headed effort from close range by Papiss Cisse goes wide left of the target.
Inswinging corner taken right-footed by Yohan Cabaye, save by Jose Reina.
Free kick awarded for a foul by Jon Flanagan on Demba Ba. Yohan Cabaye takes the direct free kick.
Steven Gerrard produces a cross.
Craig Bellamy produces a cross.
Header from deep inside the area by Mike Williamson goes over the bar.
Shot from 35 yards by Demba Ba. Blocked by Jon Flanagan. Hatem Ben Arfa takes a short corner.
Hatem Ben Arfa delivers the ball, clearance made by Martin Skrtel. Inswinging corner taken by Hatem Ben Arfa from the right by-line.
Centre by Jonjo Shelvey.
Jonjo Shelvey is penalised for handball and concedes a free kick. Cheick Tiote takes the free kick.
Free kick taken by Jay Spearing.
Booking Papiss Cisse is shown a yellow card for unsporting behaviour.
Free kick awarded for a foul by Cheick Tiote on Luis Suarez.
Long distance shot from Yohan Cabaye misses to the left of the goal.
Close range header by Andy Carroll goes over the bar.
A cross is delivered by Andy Carroll, clearance made by Mike Williamson.
Foul by Mike Williamson on Andy Carroll, free kick awarded. Free kick taken by Sanchez Jose Enrique.
The ball is sent over by Danny Simpson, Jose Reina makes a comfortable save.
A cross is delivered by Craig Bellamy, clearance made by Mike Williamson.
Free kick awarded for a foul by Luis Suarez on Mike Williamson. Free kick taken by Tim Krul.
The ball is crossed by Cheick Tiote, save by Jose Reina.
Assist on the goal came from Hatem Ben Arfa.
18:32 Goal scored
Goal! - Papiss Cisse - Newcastle 1 - 0 Liverpool Papiss Cisse finds the back of the net with a headed goal from close in. Newcastle 1-0 Liverpool.
Unfair challenge on Andy Carroll by Cheick Tiote results in a free kick. Steven Gerrard takes the direct free kick.
Free kick crossed left-footed by Hatem Ben Arfa.
Booking Jonjo Shelvey is shown a yellow card for unsporting behaviour.
Jonjo Shelvey concedes a free kick for a foul on Papiss Cisse.
The ball is swung over by Craig Bellamy, Hatem Ben Arfa makes a clearance. Inswinging corner taken from the left by-line by Steven Gerrard, Danny Simpson manages to make a clearance. Outswinging corner taken from the right by-line by Craig Bellamy, Headed effort from inside the area by Andy Carroll misses to the left of the goal.
The ball is delivered by Demba Ba, comfortable save by Jose Reina.
Danny Guthrie crosses the ball, clearance by Sanchez Jose Enrique.
Martin Skrtel challenges Papiss Cisse unfairly and gives away a free kick. Yohan Cabaye restarts play with the free kick.
Free kick awarded for an unfair challenge on Danny Simpson by Andy Carroll. The ball is sent over by Yohan Cabaye, Papiss Cisse takes a shot. Save made by Jose Reina.
Booking Booking for Andy Carroll.
Free kick awarded for an unfair challenge on Tim Krul by Andy Carroll. Tim Krul takes the free kick.
James Perch challenges Luis Suarez unfairly and gives away a free kick. Steven Gerrard crosses the ball, Martin Skrtel has a headed effort from close in and clears the bar.
A cross is delivered by Luis Suarez, clearance by Mike Williamson.
Demba Ba sends in a cross, comfortable save by Jose Reina.
Jonjo Shelvey takes the chance to get an effort at goal. Blocked by Yohan Cabaye. Steven Gerrard takes a inswinging corner from the left by-line played to the near post, Papiss Cisse manages to make a clearance.
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