After a resilient opening 25 minutes from the Reds, a catalogue of individual errors brought about City's first goal.
Nathan Ake collected Alisson's miscued clearance and easily bypassed two players in red, before slotting Erling Haaland through to open the scoring in the 27th minute.
After the break, Liverpool showed signs of finding an equaliser, with Darwin Nunez testing Ederson on a couple of occasions.
And even though City were also threatening down the other end, it was Trent Alexander-Arnold that brought Liverpool parity in the 80th minute, taking up the ball on the edge of the box before drilling it into the far corner.
Despite a mixed performance, the Reds saw out the game to pick up a point in what has proven to be a defining fixture in past Premier League seasons for the club.
Here are the player ratings from the contest.
ALISSON (GK): 5
Got away with a massive blunder early on after passing it straight to Phil Foden on the edge of the box, who could only produce a tame effort at goal. Ultimately at fault for the goal, with another miscued clearance allowing Ake to slot Haaland through to finish. Then fluffed a corner in the second half which saw the ball poked into the net - only for Chris Kavanagh to blow for a pretty soft foul on the Brazilian. Not his day.
TRENT ALEXANDER-ARNOLD (RB): 8
Had his work cut out against the electrifying Jeremy Doku, but he stuck to his task. He was too easily beaten by Ake for the first goal, but he made amends with a fantastic finish 10 minutes from time to give Liverpool parity.
JOEL MATIP (CB): 7
Struggled at times against City's firepower, but made some important interventions. Massive block to deny a goalward Bernardo Silva effort in injury time. Booked for a foul on Doku.
VIRGIL VAN DIJK (CB): 7
Solid defensively and composed when distributing from the back.
KOSTAS TSIMIKAS (LB): 7
One of Liverpool's strongest defensively, making important challenges and playing out from the back well.
ALEXIS MAC ALLISTER (CM): 7
Not too involved but when called upon, was often composed and did his job. Had a couple efforts from range blocked. Subbed.
DOMINIK SZOBOSZLAI (CM): 6
Lovely interplay with his teammates in the first-half, slotting Darwin Nunez through a couple of times. Drifted after the break. Subbed.
CURTIS JONES (CM): 5
Nearly put Alisson in a world of trouble when trying to pass out the back from his own six yard box. Caught in possession too often and passing a bit over-ambitious. Subbed.
MOHAMED SALAH (RW): 7
Acted as Liverpool's main source of attacking threat in the first half, dinking a couple of dangerous balls in from the right. Set up Alexander-Arnold for his equaliser.
DARWIN NUNEZ (ST): 6
Forced Ederson into a couple of big saves but didn't always show the composure needed when in promising positions. Booked for a challenge on Foden when tracking back. Subbed.
DIOGO JOTA (LW): 6
Absent from the game for the first half an hour, but grew into the game towards the end of the first 45. However, an untimely injury brought an early end to his afternoon. Subbed.
LUIS DIAZ (DIOGO JOTA, 54'): 7
Provided the cross that led to the Alexander-Arnold equaliser. Had a half-chance at the very end, but his header came to nothing.
RYAN GRAVENBERCH (CURTIS JONES, 54'): 6
Was subject of a massive penalty appeal by City, when Rodri believed his strike hit the Dutchman's arm. The ball hit his lower thigh.
CODY GAKPO (DOMINIK SZOBOSZLAI, 73'): 6
Not greatly involved after his introduction.
WATARU ENDO (ALEXIS MAC ALLISTER, 85'): N/A
Minutes for the Japan captain.
HARVEY ELLIOTT (DARWIN NUNEZ, 85'): N/A
Helped see out the result.