Match ends, Wolverhampton Wanderers 2, Liverpool 1.
Ruben Neves' superb second-half strike sent Wolves through to the FA Cup fourth round at the expense of a Liverpool side that featured three teenagers making their full debuts.
Reds boss Jurgen Klopp made nine changes to his starting XI, which included 17-year-old midfielder Curtis Jones and 18-year-old Rafael Camacho.
They were joined by Dutch defender Ki-Jana Hoever - at 16, the club's third youngest debutant - in the sixth minute following an injury to Dejan Lovren.
Wolves found it difficult to trouble the inexperienced backline until the 38th minute when Raul Jimenez fired them ahead following an error by midfielder James Milner.
Divock Origi levelled for the visitors six minutes after the break with the side's first effort on target, when he fired a brilliant strike through the legs of Leander Dendoncker and past goalkeeper John Ruddy.
But that parity lasted four minutes as Neves launched a venomous dipping shot from 31 yards that beat Simon Mignolet at his near post.
Xherdan Shaqiri's free-kick, magnificently pushed on to the post by John Ruddy, was the Reds' only other effort of note.
Wolves, who knocked Liverpool out of the FA Cup for the second time in three seasons, will be away to the winners of the tie between Stoke and Shrewsbury in the fourth round.
- Arsenal to host Man Utd - full draw for fourth round
- Football Daily podcast: Reaction to Wolves' victory and FA Cup draw
Second-string Reds fail to sparkle
Liverpool manager Jurgen Klopp will have been dismayed with the way his first-team hopefuls performed for much of the match.
His strikeforce of Daniel Sturridge, out of contract in the summer, and Belgian Origi failed to gel, managing only one pass between them in the first half and only one touch in the opposition's penalty area.
Absent was the running into pockets and slick passing made into a fine art form by their regular attacking trio of Mohamed Salah, Sadio Mane and Roberto Firmino, and instead the makeshift XI littered the pitch with misplaced balls.
Liverpool did improve slightly after the break. Origi's goal should have given them that much-needed impetus, but before they could pressure the home side again, they fell behind again.
The Reds came agonisingly close to equalising a second time when Shaqiri's fantastic free-kick was tipped on to the post by an equally brilliant save from Ruddy.
Klopp brought on big guns Salah and Firmino with 20 minutes to go, but the pair could not inspire a late fightback.
Jimenez and Neves light up Molineux
Wolves, like Liverpool, were sub-standard for much of that opening period. The onus was them to test the Reds' inexperienced defence, and it seemed as if they would head into the break with only one effort on target - Jimenez's 34th-minute strike which was easily held by Mignolet.
However, seven minutes before the interval they made the breakthrough which came, ironically, from a mistake by Liverpool's most experienced player on the pitch.
Milner, inside his own half, failed to control a pass from Alberto Moreno and the loose ball was seized upon by Jimenez. The Mexico international surged into the Liverpool area before he whipped a low shot past the reach of Mignolet.
That was an excellent individual goal, but Neves' was better. The Portuguese player, who has made a habit of scoring stunners, picked up the ball from more than 30 yards before launching an effort which Mignolet barely had time to react to.
Hoever, 16, leads the young pretenders
So what of the teenage trio?
Camacho produced a competent display at right-back and Jones produced one good run and cross during the first half.
But most impressive was Hoever, who joined the Reds from Ajax in the summer. Thrown into the cauldron after Lovren's hamstring injury, Liverpool's youngest player in FA Cup history, grew into his role alongside stand-in centre-back Fabinho.
He also produced one of the moments of the match when he raced out from defence to set up a Liverpool attack.
The Dutch player could become a fans' favourite if he gets given more first-team chances.
Klopp said he was left with little choice but to play teenager Hoever.
"It doesn't make sense to bring in a 16-year-old boy from the start," said the German. "You don't bring him, you wait until he is completely ready, but he did well.
"That's how it sometimes starts - when you are really needed, then it is only about if you are good enough - and not how old you are."
Long-range lover Neves - the stats
- Wolves earned their first home win against Liverpool in seven attempts (D3 L3), since a 1-0 win in August 1981.
- Liverpool have been eliminated from the FA Cup in six of their past eight ties against fellow Premier League opponents.
- Wolves have eliminated Liverpool from the FA Cup five times - Stoke are the only side they have knocked out of the competition more (six).
- Jimenez's goal was Wolves' first at home against Liverpool in 398 minutes, since Kenny Miller scored a 90th-minute goal against them in January 2004.
- Eight of Neves' nine goals for Wolves in all competitions have been from outside the box, with his other strike coming from the penalty spot.
- Origi scored his second goal in the FA Cup, with the other also coming against Wolves back in January 2017.
- At 16 years and 354 days, Hoever became Liverpool's youngest ever player in the FA Cup, and third youngest to debut for the Reds overall.
- Shaqiri has ended on the losing side in all four of his appearances in the FA Cup (three times with Stoke).
Liverpool are away at Brighton on Saturday (15:00 GMT) and Wolves are at Manchester City next Monday (20:00 GMT).
- 19Castro OttoSubstituted forDohertyat 75'minutes
- 28João Moutinho
- 9JiménezSubstituted forHélder Costaat 83'minutes
- 18JotaSubstituted forCavaleiroat 52'minutes
- 10Hélder Costa
- 6LovrenSubstituted forHoeverat 6'minutes
- 7MilnerBooked at 15mins
- 48JonesSubstituted forFirminoat 70'minutes
- 15SturridgeSubstituted forSalahat 70'minutes
- Paul Tierney
- Shots on Target
Second Half ends, Wolverhampton Wanderers 2, Liverpool 1.
Attempt saved. Fabinho (Liverpool) header from the centre of the box is saved in the bottom right corner. Assisted by Roberto Firmino.
Rafael Camacho (Liverpool) wins a free kick on the right wing.
Foul by Rúben Neves (Wolverhampton Wanderers).
Corner, Liverpool. Conceded by Conor Coady.
Offside, Wolverhampton Wanderers. Conor Coady tries a through ball, but Hélder Costa is caught offside.
Foul by Alberto Moreno (Liverpool).
João Moutinho (Wolverhampton Wanderers) wins a free kick in the defensive half.
Attempt blocked. Mohamed Salah (Liverpool) left footed shot from the right side of the box is blocked. Assisted by Xherdan Shaqiri.
Substitution, Wolverhampton Wanderers. Hélder Costa replaces Raúl Jiménez.
Attempt missed. Rafael Camacho (Liverpool) left footed shot from outside the box misses to the left following a corner.
Corner, Liverpool. Conceded by Matt Doherty.
Attempt missed. Rafael Camacho (Liverpool) left footed shot from the right side of the box is high and wide to the left. Assisted by Xherdan Shaqiri.
Corner, Liverpool. Conceded by Willy Boly.
Substitution, Wolverhampton Wanderers. Matt Doherty replaces Jonny.
Alberto Moreno (Liverpool) wins a free kick in the defensive half.
Foul by Ivan Cavaleiro (Wolverhampton Wanderers).
Substitution, Liverpool. Roberto Firmino replaces Curtis Jones.
Substitution, Liverpool. Mohamed Salah replaces Daniel Sturridge.