Roy Hodgson enjoyed a successful first return to Liverpool as West Brom snatched their first win at Anfield since 1967 with Peter Odemwingie scoring the only goal of the game.
Liverpool dominated throughout but were made to pay for a host of missed opportunities - including hitting the woodwork twice - as the Baggies went in front from Glen Johnson's mistake 15 minutes from time.
It was the 12th time in 17 home games the Reds have failed to win.
Maxi Rodriguez appeared to be caught by Billy Jones on the edge of the six-yard area but referee Neil Swarbrick waved away penalty appeals.
Dirk Kuyt then dragged a shot wide before Luis Suarez had a shot parried by Ben Foster, with the rebound blazed over by Rodriguez.
Andy Carroll headed wide, Suarez nodded on to the roof of the net and Daniel Agger had a close-range shot turned behind.
If it not been for the brilliance of Jose Reina West Brom might have soon taken the lead. The Spain international produced an instinctive one-handed save low to his left to stop Chris Brunt's 28th-minute volley before blocking a fierce Liam Ridgewell shot.
In the second half, Jordan Henderson smashed a shot against the crossbar, Suarez produced a trademark weaving run along the byline before firing over and Rodriguez was wayward from another Carroll knockdown.
Foster then saved from Suarez, with Carroll falling over as he tried to force home the rebound.
But the 75th minute brought the sucker punch for the Reds fans. Glen Johnson gave the ball away to Youssouf Mulumbu, who played in Odemwingie to shoot past Reina.