The Anfield side, who know they will soon have their French manager back in control, turned in a sensational performances of high speed, flowing football to maintain their very real title dreams.
Houllier, now back in Liverpool after his latest spell of recuperation, had visited the team to give a title run-in pep talk - and everybody was clearly listening.
Newcastle arrived with dreams of their own, but they were steamrollered by a blistering Liverpool performance.
Nicolas Anelka was outstanding, with his pace and power unnerving and finally unseating Bobby Robson's team.
Danny Murphy bagged fine goals in each half, under the gaze of England boss Sven-Goran Eriksson, while Dietmar Hamann got the third goal - against his former team.
The goals may well have come from midfielders, but it was Liverpool's pacy front trio of Anelka, Emile Heskey and Michael Owen who did the real damage.
The Geordies tried their best but they could not live with Liverpool in this blistering form.
Manchester United may well have recaptured the Premiership top spot, but Houllier's team - under Phil Thompson's temporary command - will be right there at the death.
The game may have been delayed by 30 minutes by a floodlight failure, but there was no power blackout on the pitch where the sides in third and fourth place before kick off, surged at each other from the start.
Anelka - virtually unused by Paris St Germain this season prior to his loan move to Anfield - has now regained all the pace and strength he once showed at Arsenal.
The French striker attacked the left of Newcastle's defence, with Owen tormenting Nikos Dabizas and Andy O'Brien - while Heskey was a nightmare for Aaron Hughes.
Not that Newcastle took all this blistering flair without response.
Laurent Robert blazed into the side-netting, Abel Xavier had to kick off the line and substitute Clarence Acuna somehow hooked over from eight yards in the first period.
But it was Liverpool who deservedly took the lead on 33 minutes.
Anelka surged away and pulled his cross behind Owen - only to see Murphy burst into the box to fire the ball inside Shay Given's near post.
The Irish goalkeeper had beaten away a Dietmar Hamann piledriver, saved well from Anelka under the angle and been by far the busiest goalkeeper in the opening spell.
Owen had two shouts for penalties turned away by referee Jeff Winter when he was pulled down first by O'Brien and then by Dabizas as Liverpool stretched Newcastle all over the pitch.
But the Magpies hit back with teenager Jermaine Jenas, Nolberto Solano and the awkward Carl Cort - starting his first match this season after knee trouble - causing Sami Hyypia and Stephane Henchoz plenty of worries.
The second period didn't let up for a second, with Liverpool doubling their advantage on 52 minutes.
Heskey worked the ball in from the left, Murphy took over and managed to squeeze his way through a packed area to slam home his second of the night off a post.
Owen should have made it three when he surged away from Hughes cutting in from the left, but Given produced another excellent save, a minute before Cort's near post effort from a Solano free-kick was ruled out for handball.
Newcastle threw everything forward and gave Liverpool a searching examination in the air and down both flanks.
Anelka and Smicer saw close-range drives blocked by Dabizas before Liverpool's one black spot of the evening arrived when Owen had to limp away with 20 minutes left after crashing down in the box under pressure from two defenders as he raced away yet again.
Jari Litmanen came on, and five minutes later Liverpool were three goals up - and home and dry.
Newcastle were reeling from more waves of attacks and when Smicer touched the ball to Hamann - 20 yards out - the midfielder coolly sidefooted a fine shot into the bottom corner.
Newcastle's fans sung "we're going to win 4-3" - they have lost twice by that margin in this match in recent years - but there was not going to be a miracle result this time.
This was Liverpool at their very best, as they recaptured their home form and made a clear statement of intent for the final couple of months of what is becoming a wonderful title race.