Saints' opener arrived in the 61st minute when James Beattie swept home his 11th goal of the season from the penalty spot after Sami Hyypia clumsily upended Matt Oakley.
And the home faithful were sent into ecstasy 10 minutes later when Reds substitute John Arne Riise, under no pressure, incredibly headed Marian Pahars' cross over his goalkeeper Jerzy Dudek and into his own net with his first touch of the ball.
The Merseysiders' on-loan forward Nicolas Anelka was expertly marshalled throughout by Saints defender Paul Williams, a free transfer signing from Coventry.
And home goalkeeper Paul Jones rescued Southampton - who have now won five of their last seven games - on the only occasion Williams allowed Anelka to escape his shackles and crack a sweet 15-yard half-volley goalwards in the 36th minute.
Liverpool's stand-in boss Phil Thompson left Michael Owen out of his squad tonight to ensure the England striker is fully-fit for the vital showdown at fellow title-chasers Arsenal on Sunday.
Owen's minor ankle problem allowed Anelka the opportunity to start alongside Jari Litmanen.
For Gordon Strachan's side, Norwegian Claus Lundekvam returned after a facial injury to line up in central defence with Williams.
Anelka stole a two-yard headstart on Williams after a brilliant diagonal through-ball from Litmanen in the 11th minute, but the stocky centre-back surprisingly outsprinted the lean French forward and comfortably shepherded the ball back to keeper Jones.
Saints left-back Wayne Bridge - rumoured to be a £8million Liverpool target - tested Dudek with two curling crosses, before Liverpool's first real attack looked poised to deliver the opening goal in the 20th minute.
Lundekvam blocked Danny Murphy's far-post shot after Vladimir Smicer's cross.
But it was the visitors' defence which was looking the more shaky - and Pahars burst forward again four minutes later for Paul Telfer to bundle a shot goalwards.
At the other end, Jason Dodd deflected Litmanen's 18-yard drive over the crossbar.
Saints suffered an injury blow after 34 minutes when midfielder Rory Delap limped off with what appeared to be a calf strain. He was replaced by Oakley.
Litmanen prodded a clever ball through to Anelka two minutes later, and for once, Williams stumbled. The Frenchman smacked a sweet half-volley that Jones superbly palmed round the post.
The start of the second period followed a similar theme to opening of the first half - Southampton pressing and searching for a defence-splitting Beattie headed knock-down, while Liverpool attempted to build up possession and break down the resolute home backline.
Saints' Telfer swung a corner into the six-yard box and, as Beattie's header was blocked, Chris Marsden's point-blank shot was brilliantly parried by Dudek.
And there was drama in the 61st minute as Saints substitute Oakley raced into the penalty area and was upended by Hyypia.
Referee Graham Poll rightly pointed to the spot and Beattie swept home a fine penalty kick, past Dudek's dive to his left. It was the striker's 11th goal of the season and fourth in the last four matches.
Danny Murphy's close-range volley was bravely blocked by Dodd in the 71st minute - and play immediately switched to the other end for Liverpool substitute Riise to amazingly head the ball into his own net with his first touch of the ball.
Pahars broke down the left wing and delivered a hopeful cross that Riise - who had come off the bench just 60 seconds beforehand - looped over the stranded Dudek and into his own net for a nightmare blunder.
There was further embarrassment for the visitors as Thompson had to be separated from Saints coach Dennis Rofe by the fourth official in a touchline bust-up over a bad tackle on home substitute Brett Ormerod.