Mohamed Salah missed a penalty as Philip Billing's first-half goal proved enough for Bournemouth to stun Liverpool 1-0 and move out of the Premier League relegation zone.
Bournemouth took the lead against the run of play with a 28th-minute opener. January arrival Dango Ouattara raced away from Virgil van Dijk and cut the ball back for Bournemouth top scorer Billing to poke home from close range.
Liverpool were awarded a penalty with just over 20 minutes remaining as referee John Brooks consulted the VAR screen and penalised Adam Smith for handball when he blocked a goal-bound header from substitute Diogo Jota.
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But Salah blasted his penalty well wide of Neto's right-hand post as Liverpool missed a glorious opportunity to snatch an equaliser.
Substitute Ryan Christie forced a good save from Alisson late on, with Bournemouth weathering a late surge from the away side to hang on and claim an important three points, denting Liverpool's top-four hopes.
The result sees Bournemouth climb off the bottom of the table to 16th, while Liverpool stay fifth ahead of the rest of the weekend's fixtures.
How Bournemouth beat Liverpool
Bournemouth switched from a back three to a back four for this game but it was Liverpool who posed the early threat with Van Dijk seeing a towering back-post header cleared off the line by Jefferson Lerma, who showed alertness and composure to head the ball away after a precise Trent Alexander-Arnold corner.
Bournemouth fashioned an opportunity on the break shortly after, but Ouattara could only find the side netting after rounding Alisson during a swift counter-attacking move.
Andy Robertson saw a shot across goal saved well by Bournemouth goalkeeper Neto before Liverpool had a goal ruled out for offside in an action-packed first 20 minutes, with Cody Gakpo beyond the last defender when he latched on to a Darwin Nunez header to volley into the net.
Bournemouth continued to look dangerous on the counter, taking the lead against the run of play after Ouattara beat the offside trap after a ball over the top from Smith.
Ibrahim Konate was playing the £20m January arrival on and Ouattara capitalised on a slip from Van Dijk to get to the byline and square for Billing who ran into the box and tapped home from seven yards.
Liverpool looked stunned by going a goal down, but started the second half on the front foot with a near-instant impact from substitute Jota, on in place of Harvey Elliott, who drove at the Bournemouth defence and fired a powerful shot that forced a diving save from Neto.
Marcos Senesi should have doubled Bournemouth's lead just shy of the hour-mark but the Argentine failed to connect with Billing's corner, with what looked like a free header.
Salah missed a glorious opportunity to equalise from the spot, missing the target from 12 yards after Smith was adjudged to have handled in the box following a header from Jota.
The home side were denied a second when Alisson saved from Christie late on, with Gakpo firing over in injury time as Gary O'Neil's side held on to claim a vital three points.
O'Neil: That kind of result was coming
Bournemouth boss Gary O'Neil: "I haven't smiled that much after games recently. That's been coming, to be honest - Manchester City and Arsenal are two performances (leading up to this one) that the boys should have been proud of that we didn't take anything from, but today fine margins go in our favour and we beat one of the best teams in England.
"A little bit disappointed we didn't score more than one, but we're competitive and we've had a right go against a very, very good team and today, as the lads deserved, the result went our way."
Klopp: It was never really our game
Liverpool boss Jurgen Klopp: "What can I say? It was never really our game. Of course, we were dominant in the first half but they were a very compact side and they had the counter-attacks that they wanted to have. I really think the spaces where we have to play were super-clear, super-open - we didn't use it [the space] often enough. We didn't enjoy the challenge to face a deep, compact side.
"Then we go 1-0 down, not helpful obviously. In a counter-attack they did always the same stuff, but it was successful enough because we didn't defend it well. I thought we started pretty OK second half, then we get the penalty, miss it, and then we were in a rush, so we didn't create really enough there and that's it.
"It's completely hypothetical but I think if we score there, the game could turn. It doesn't make the performance better, but it could change the result at least. That's it. But he [Salah] scores a lot of goals, now he misses a penalty - that's life."
Opta Stats: Bournemouth beat Liverpool for just the second time
- Bournemouth recorded only their second-ever competitive win against Liverpool and first since a 4-3 victory back in December 2016. Indeed, it was only their second clean sheet against the Reds and first since January 1968 (0-0).
- Liverpool have lost consecutive Premier League matches against opponents starting the day bottom of the table for the first time since December 2010-February 2011 (vs Wolves and West Ham respectively).
- Gary O'Neil became the first English manager to defeat Jürgen Klopp's Liverpool in 23 Premier League matches (D4 L18) and first since Scott Parker in March 2021 (Fulham 1-0 Liverpool).
- Liverpool (D1 L2) have failed to win away against all three promoted clubs in a single Premier League campaign for only the third time, also doing so in 2010-11 (L3) and 2003-04 (D2 L1).
- Liverpool's Mohamed Salah took his 21st penalty in the Premier League, with today's effort his first to completely miss the target (18 scored, 2 saved previously).
- Since his debut in the competition on January 21st, no player has provided more assists in the Premier League than Bournemouth's Dango Ouattara (3 in 7 apps).
What's next?
Liverpool's next match sees them travel to the Santiago Bernabeu for a Champions League tie with Real Madrid.
The Reds trail Real 5-2 heading into the second leg. Liverpool's next Premier League game is away against rivals Manchester City in a lunchtime kick-off on Saturday April 1.
Bournemouth are next in action against Aston Villa. They travel to Villa Park for a 3pm kick-off next Saturday.