Jurgen Klopp suffered his first defeat as LFC manager after a late second half winner from Scott Dann.
The game was held on Remembrance Sunday
With James Milner out with injury, the captain's armband was handed to Lucas Leiva. Meanwhile, watching in the crowd was former captain Steven Gerrard. The LA Galaxy man sat alongside the injured Jordan Henderson and Jon Flanagan to watch his first game at Anfield since he played in his farewell last season - also against Crystal Palace. Also a defeat.
In heavy rain the game got underway with the visitors showing plenty of power in the opening period. Liverpool however enjoyed the most possession in the first 15 minutes.
However it was Palace who made the first breakthrough - Bolasie who had been giving Moreno plenty of trouble early on picked up on a poor defensive error by Emre Can. The German midfielder failed to clear a dangerous ball inside our area and instead attempted a cushioned pass to Lucas Leiva.
The ball fell to Bolasie who smashed it in to the right hand corner of the Kop goal.
The reds were dealt a further blow when Mamadou Sakho landed badly on his right knee after attempting a header. The stretcher was out but Sakho hobbled off. As Lovren prepared to come on Sakho decided he wanted to continue to thunderous applause from the LFC fans.
However he was eventually replaced by Dejan Lovren moments later and fans will now face an anxious wait on his injury news.
Liverpool managed to get the important equaliser in the 42 minute, just before half time.
Clyne powering down the right hand side sent a ball across the penalty area. Lallana got a touch, Benteke allowed it to roll onwards to the onrushing Coutinho who fired in for his 3rd goal in 2 league games.
Both sides continued to battle in the second half as the rain eased off.
Chances arrived less frequently, and mid way through the half Klopp made an attacking substitution to try and get all three points - bringing Firmino on for Emre Can.
Jordon Ibe had another fine game for Liverpool - with Klopp applauding many of his moves from the sidelines and the young Englishman looking over for signs of appreciation.
In the final 10 minutes however the reds were undone - Scott Dann, boyhood Liverpool fan, grabbing the winner for Palace.
The goal, unsurprisingly, arriving coming via a corner. Dann unmarked - and Mignolet failing to hold the initial chance.
Origi came on to replace Ibe, but the reds couldn't find another equaliser and Liverpool's 12 game unbeaten run comes to an end.
A two week international break now awaits. Liverpool are 10th after 12 games.