Home side Liverpool struck first when Mohamed Salah gave the team the lead in the 17th minute, but the equaliser from Julian Alvarez came just ten minutes later.
The result stood the half out, before City connected immediately in the second.
A minute into the second half, Riyad Mahrez, out on the right, found his way in to Kevin De Bruyne who made it 2-1. Ilkay Gündogan then made it 3-1 from close range before Jack Grealish, brilliant for the day, made the final score 4-1 with just over a quarter of an hour remaining.
Goal-scoring machine Erling Haaland, who tops the scorers with 28 hits, is groin injured and was not included in City's squad.
"He's much, much better, but not ready today. He wasn't feeling well, we're not taking any risks," coach Pep Guardiola said according to the Football Channel.
Table runners-up Manchester City are now keying in on series-leading Arsenal. City go up on 64 points, four less than the London club.