It was one-way traffic for the vast majority of the first-half, with the likes of Kai Havertz, Reiss Nelson and Martin Odegaard having a number of massive opportunities to break the deadlock.
Odegaard came closest to opening the scoring for Arsenal, smashing the bar from inside the area out after Joe Gomez was initially caught in possession on the edge of his own box.
Struggling to cope with the rampant Arsenal press, Liverpool were praying to get into half-time level - yet on the stroke of the interval, they came inches from taking the lead themselves, with Trent Alexander-Arnold this time being the one to rattle the crossbar.
Things improved after the break for Liverpool, with Darwin Nunez in particular growing into the game as he moved onto the left-hand side.
The Uruguayan came close to an opener soon after the restart, flashing a curled strike past Aaron Ramsdale's goal after cutting into the box.
However, Arsenal continued to press down the other end in what had now become a frantic end-to-end game.
The defining moment came 10 minutes from time, as a whipped Alexander-Arnold delivery diverted off the head of Gunners defender Jakub Kiwior into his own net to give Liverpool a precious lead.
Despite Arsenal's efforts to find an equaliser, the Reds were able to seal the game in stoppage time, with Diaz firing into the top-right corner on the break.
Here are the player ratings from the game.
ALISSON (GK): 7
Good save to deny Kai Havertz early on as Arsenal put the Reds under the cosh. Was later equal to a fizzed strike from Ben White. Made a vital claim from an injury time corner.
TRENT ALEXANDER-ARNOLD (RB): 9
Constant source of energy, driving into midfield with bursts of pace before distributing with aplomb. Composed as you like when cleaning up at the back. Came inches from giving Liverpool an admittedly undeserved lead on the stroke of half-time, rattling the bar with a powerful right-footed strike. His crucial contribution came 10 minutes from time, whipping in a delightful ball from his wand of a right-foot which was met by the head of Arsenal defender Kiwior, who put into his own net.
IBRAHIMA KONATE (CB): 9
Made a massive block to keep the game goalless, sliding in front of Reiss Nelson to deny what would have been a tap-in. Consistently successful in his challenges, being the failsafe defender when one of his teammates were beaten. This was especially the case after Gabriel Martinelli came on, foiling the Brazilian winger every time he beat Alexander-Arnold and drove into the box. There when needed, exquisite.
JARELL QUANSAH (CB): 6
Lovely sliding interception to cut out a potentially dangerous Arsenal counter-attack from a Liverpool corner. However, became susceptible to the Arsenal press and gave the ball away in Liverpool's final third, only spared embarrassment by the poor finishing of Kai Havertz.
JOE GOMEZ (LB): 6
Was spared his blushes after being dispossessed in an incredibly dangerous position, with Arsenal unable to capitalise on the clear-cut chance that came from his error. Grew into the game, standing up strong to the threat of Bukayo Saka - which included some brilliant defending to deny the England winger after breaking in behind.
ALEXIS MAC ALLISTER (CM): 5
Struggled to get into the game in the first half, often being overrun by the rampant Arsenal press. Case in point, he was dispossessed in Liverpool's final third near the half-hour mark, a mistake that could very well have proved costly. In fairness, he redeemed himself by getting back and blocking the eventual effort from Havertz. Subbed on the hour, with Jurgen Klopp not wanting to overdo it on the Argentinian's full return from injury.
CODY GAKPO (CM): 6
Grew into the game after being absent during the opening stages, showing ability in tight situations. Subbed.
CURTIS JONES (CM): 6
Produced a filthy piece of skill after tussling for the ball in Arsenal's corner, scoop turning Ben White before getting shoved to the ground. Skied a curling effort into row Z. Subbed.
HARVEY ELLIOTT (RW): 6
Had big shoes to fill in the absence of Mohamed Salah. Started promisingly, running in behind and even taking a free-kick off of Alexander-Arnold. However, as the game went on, he struggled to be overly impactful - with the only notable contribution being a speculative shot from range that went straight down the throat of Ramsdale. Booked for dissent and subbed.
DARWIN NUNEZ (ST): 7
Headed wide from a corner in what was Liverpool's biggest opening during the first 20 minutes. Massively grew into the game after the break when moving onto the left, and on one occasion flashed a venomous curling effort in front of goal. However, as Liverpool broke in a two-vs-one situation, he slipped the crucial through ball behind the on-running Luis Diaz, seeing one of the biggest chances of the game go begging.
LUIS DIAZ (LW): 7
After a quiet first-half, he become increasingly involved after the restart. He forced Ramsdale into the save of the game, drilling it towards the bottom left-corner only to be denied by the diving hand of the English stopper. Wheeled away in celebration as Kiwior crucially headed into his own net, then got one of his own to finish the contest.
DIOGO JOTA (GAKPO, 59'): 7
Playing down the middle, he headed onto the bar as Liverpool looked for an opener.
RYAN GRAVENBERCH (MAC ALLISTER, 59'): 7
Strong on the ball and won the free-kick that led to the opener. Showed serious grit and determination since his arrival.
BOBBY CLARK (JONES, 75'): 6
Minutes for the youngster, got to join in the celebrations.
CONOR BRADLEY (ELLIOTT, 75'): 8
Moving into right-back, allowed Alexander-Arnold more freedom in midfield. Stood up well to the likes of Martinelli. Top class cameo.