Harry Kane scored a brace as Tottenham Hotspur claimed their first win over Liverpool in five years in rampant style, ruthlessly taking advantage of the visitors' defensive mishaps for all four of their goals.
Kane needed just four minutes to open the scoring before Heung-min Son doubled Spurs' advantage after 12, with Dejan Lovren - substituted after half-an-hour - particularly culpable for both goals.
The Reds pulled one back through Mohamed Salah's ninth goal of the season, but more poor awareness at the back allowed Dele Alli to volley in a decisive third in first-half stoppage-time.
Kane scored his second just before the hour mark when Simon Mignolet failed to punch clear a free-kick. Though Roberto Firmino cleared off the line from Jan Vertonghen, Kane dispatched the rebound for a long-awaited three points against the Merseyside outfit.
Their second successive league win at Wembley Stadium takes Mauricio Pochettino's charges up to third in the Premier League table and level on points with Manchester United in second.
Spurs are five points off leaders City but their performance indicated that they can yet have a sizeable role to play in the destination of the title this term.
Having now conceded 16 goals - their worst top-flight total after nine games since 1964-65 - Liverpool drop below Burnley into ninth with a negative goal difference.
The Merseyside outfit are 12 points off City, with their title ambitions already over and growing concern for their top-four prospects. Questions will once again be asked of their insufficient summer investment defensively after the horrific display of their back-line.
Handful of changes for both sides
Both sides made three changes each from their respective mid-week Champions League encounters.
Kieran Trippier, Son and Alli all came in to replace Eric Dier, Moussa Sissoko and Fernando Llorente for Spurs, while Serge Aurier made his first league start since his red card at West Ham last month.
Mignolet replaced Loris Karius in goal for the visitors while Trent Alexander-Arnold made way for Joe Gomez at right-back. James Milner kept his place in midfield with Georginio Wijnaldum out injured.
Spurs race into two-goal lead
Kane's last 13 goals had all come away from home - a joint-Premier League record - but he took just four minutes to break the deadlock and net his first ever home goal against Liverpool here.
A succession of defensive errors - Lovren misjudging Trippier's pass, Joe Gomez leaving Kane onside and Matip reacting slowly to the striker's run - allowed the Spurs front-man to get in behind and round the on-rushing Mignolet to score.
Spurs - in a 5-3-2 set-up similar to the one that earned them a draw at Real Madrid but with Son up top with Kane - were handed another gift on 12 minutes when Lovren again misjudged a simple ball forward.
Hugo Lloris caught Milner's cross and immediately looked to send Spurs on the break. The Croatian defender completely missed the keeper's long throw, leaving Kane to stride into space and cross brilliantly for the unmarked Son to finish past Mignolet.
Spurs ran rampant and went close to ending the contest on 16 minutes when Son split Joël Matip and Lovren to control with his chest and drive a powerful effort back off the underside of the bar.
Only Matip's interception then prevented Son from returning the favour to Kane off another counter-attack with Liverpool overrun by Spurs' electric attack.
Salah pulls one back for Liverpool
Spurs' shape had appeared to nullify the away side but Liverpool once again profited from Salah's pace and movement to halve the deficit on 24 minutes.
After Kane was dispossessed by Coutinho, Henderson's first-time through ball found the run of the Egyptian - whose speed took him clear of Jan Vertonghen - and allowed him to fire in off the far post.
Jürgen Klopp's side continued to look through Salah and he forced another save from Lloris - albeit a tame one - when he met Philippe Coutinho's cross with a header at a tight angle.
Spurs lost control as Liverpool gained in confidence, but their two-goal advantage would have been restored had it not been for Mignolet's left leg. The Belgian spread himself well to keep out Son's stabbed attempt after the forward had snuck in behind Lovren.
Lovren did well to get back and block Kane's shot minutes later but that was his only real positive contribution of the afternoon, and also his last, as his nightmarish afternoon was replaced by Alex Oxlade-Chamberlain after half-an-hour.
That saw Gomez move inside to centre-back and Can dropped into right-back as Liverpool started to more regularly threaten Spurs. Salah's running was a constant option, but they were unable to take advantage - often due to Spurs' excellent defensive recoveries.
Alli restores Spurs' two-goal lead
Kane might have scored a second when this time Gomez was the Liverpool player caught underneath a long ball. Kane brilliantly turned between Gomez, Jordan Henderson and Emre Can into space but drilled into the side-netting from the edge of the area.
Yet on the very cusp of half-time, with Liverpool having been the better side for 20 minutes, the Lilywhites made it 3-1 and restored their cushion of comfort.
Can was dispossessed by Alli and a frustrated tackle from behind allowed Christian Eriksen to tease a cross into the box from a free-kick. The Dane's delivery was not to his usual standard but Matip's clearing header - when he could have allowed the ball to go out of play for a goal kick - sat up for Alli to volley into the bottom corner from 20 yards.
Liverpool enjoyed some bright moments in the second-half, Oxlade-Chamberlain particularly on the left side, but they were only brief flashes and they produced no end product of note before the hour.
Kane scores his second to kill the game
And again they were made to pay for yet more sub-standard defending when Kane scored his second of the afternoon, this time Mignolet the main culprit.
Mignolet flapped at Trippier's free-kick and could only clear as far as Vertonghen, who was only denied a goal by Firmino's goal-line clearance. But it fell for Kane to lash home Spurs' fourth, and his second, as they began to humiliate the away team.
The tempo dropped, allowing Liverpool to try and respond. Coutinho's curling strike was denied by a stunning stretching Lloris save, tipping the shot on to his crossbar with his left hand, while Alberto Moreno, Milner and Salah also brought stops from the Frenchman.
Yet the visitors could not do anything to reduce their margin of defeat on a chastening afternoon in the capital as title hopefuls Spurs produced a breathtaking reminder of their capabilities this year.