Dirk Kuyt opened the scoring before Lucas Leiva doubled their advantage before the interval.
Fernando Torres looked to have put the contest beyond doubt but Oscar Cardozo's free-kick set up a nervy finish.
However, Torres had the last laugh as he raced through to finish, securing a 5-3 aggregate success and setting up a last-four clash with the Spanish outfit where he made his name.
Sotirios Kyrgiakos and Yossi Benayoun were drafted in by manager Rafael Benitez for suspended duo Emiliano Insua and Ryan Babel but it was Benfica who started the brighter.
The impressive Angel Di Maria was causing Glen Johnson problems on the left and last week's penalty hero Cardozo looking purposeful through the middle.
But it was Liverpool who struck first in controversial fashion as Kuyt nodded home Steven Gerrard's corner.
As Liverpool celebrated, the referee's assistant was flagging on the far side and it looked as though his effort would be chalked off.
But following consultation with the man in charge, the goal was awarded, much to Liverpool's relief.
With the fans on their feet at Anfield, the noise levels were raised again just seven minutes later as they doubled their lead in less dubious fashion.
As the ball broke free in the centre of the park, Gerrard picked up and slotted perfectly to the marauding Lucas.
The Brazilian kept his cool, rounded the advancing Jacobi Julio Cesar in the Benfica goal before rolling home.
Liverpool were now in complete control but, with Benfica just one goal away from squaring up the aggregate score, they handed the Reds an almighty scare just before the interval as Sidnei's effort inside a crowded area flew perilously close to Pepe Reina's far post.
A quiet start to the second period burst into life when Fernando Torres finished a fine counter-attacking move.
Gerrard, Benayoun and Kuyt played their part with the latter squaring to the Spaniard to slot home in the 58th minute.
With the contest seemingly over, the Eagles grabbed a way back into it through the sharp-shooting Cardozo.
The visitors won a free-kick on the edge of the area and the classy front man blasted through the wall to offer significant hope with 20 minutes remaining.
Soon after he had another set-piece chance in a similar position and his deflected effort crept just wide but their threat petered out as Torres stormed clear and delightfully clipped over substitute keeper Jose Filipe Moreira.
Benitez substituted talismanic duo Torres and Gerrard to a deserved rapturous applause before the referee ended the energy-sapping contest.