With title rivals Manchester City winning at Everton on Saturday, the pressure was on Brendan Rodgers and his side as they travelled to Selhurst Park needing all three points to maintain any realistic chance of ending their 24-year wait for a league crown.
Everything seemed to be in order as the visitors charged into a three-goal lead befitting of their domination of the game, before the Eagles mounted a spirited comeback to score three in nine minutes and seal a memorable draw.
City had strolled to victory in south London eight days ago but Palace did not roll over as easily against Liverpool, who now hold just a one-point advantage at the top of the table with City's game in hand coming at home to Aston Villa on Wednesday night.
Joe Allen's first Liverpool goal was enough to give the Reds a half-time lead, with fit-again Daniel Sturridge and double player of the year Luis Suarez scoring in two early second-half minutes.
But Palace have been instilled with a workmanlike attitude under Tony Pulis and, with the backing of a ferocious home crowd, miraculously clawed their way back into the game.
Substitute Dwight Gayle was the main protagonist as the hosts followed Liverpool's example by snatching two quick-fire goals.
Damien Delaney's first goal of the season started the charge before Gayle took centre stage, bagging a brace as Palace scored three in nine incredible minutes to take a share of the spoils and leave the likes of Suarez and Liverpool captain Steve Gerrard haunched over in anguish at the full-time whistle.
It was a lively opening from Palace, buoyed on by a home crowd celebrating their top-flight survival, but the visitors soon took control of possession, slowly quietening those supporters looking to enjoy a final home game of the season.
Glen Johnson felt he should have been awarded an early penalty after a wild swing at the ball from Yannick Bolasie saw the Palace winger catch him on the thigh.
Mamadou Sakho then wasted the first decent chance of the game as he was picked out unmarked from a Gerrard corner but could only head into the ground and well wide.
Johnson was the next to come close as he beat the offside trap to latch onto Allen's long ball into the Palace box, but the England international could only guide a header over Julian Speroni's crossbar.
With Liverpool in the ascendancy, the opening goal came on 18 minutes as the returning Sturridge saw a curled effort deflected behind off Delaney for a corner.
Allen found himself in space to head the resulting set-piece back across Speroni and put the visitors ahead on his 50th league appearance for the club.
Jason Puncheon, Palace's top scorer, forced Simon Mignolet into his first save of the evening shortly afterwards as his low drive nicked off Sakho, the Liverpool goalkeeper turning the ball behind for a corner.
Mile Jedinak was the next man to test the Belgium international as he arrowed a long-range shot towards the top corner, only to see Mignolet equal to it once again as he tipped the goal-bound effort over.
Pushing forward did leave Palace susceptible to Liverpool's counter-attacking threat and Suarez almost doubled their lead after good work from Gerrard and Allen found the Uruguayan inside the penalty area, with his low shot tipped away by Speroni.
The Argentinian was on hand again early in the second half to tip a bending Sturridge effort onto the post, with Suarez smashing the follow-up high and wide with a rare lack of composure.
If goal difference is to decide where the title goes for the second time in three seasons, Liverpool soon looked to make a dent in City's advantage.
Gerrard, looking to put his vital slip in the defeat to Chelsea behind him, picked out Sturridge with a sumptuous pass and his England colleague controlled the ball with aplomb before his deflected shot found its way into the bottom corner.
Just two minutes after his strike partner had scored, Suarez was on the end of another free-flowing attack, poking home past Speroni after being found by Raheem Sterling.
Sterling himself saw two shots blocked in quick succession as he looked to add a fourth.
But it was Palace who pulled a goal back with a little over 10 minutes to go as Delaney let fly with a speculative long-range effort which beat Mignolet courtesy of a deflection off Johnson.
That goal seemed to unnerve the visitors and they were soon only a goal to the good as Yannick Bolasie burst through at speed and calmly picked out Gayle, who turned the ball home to bring Palace right back into the game.
A memorable comeback was completed in the 88th minute as fellow substitute Glenn Murray chested the ball past Martin Skrtel and into the path of Gayle, who showed great composure to slide a shot under Mignolet to level proceedings.
Liverpool pushed forward in the five minutes of additional time but could not find a winning goal and will now be relying on favours from both Villa on Wednesday night and West Ham on Sunday if they are to win a 19th league title.