Liverpool's defence of the League Cup ended as Brendan Rodgers' selection gamble backfired, as former club Swansea progressed to the quarter-finals for the first time in their history following their 3-1 triumph.
The Northern Irishman left the south Wales club in the summer to take over from Kenny Dalglish but it was the visitors who had the last laugh in the fourth round of the Capital One Cup at Anfield.
Chico and Nathan Dyer put the Swans 2-0 up with 17 minutes to go and although substitute Luis Suarez quickly pulled one back,Jonathan de Guzman made it 3-1 in added time to loosen the eight-time winners' grip on the trophy.
Reds boss Rodgers made nine changes from Sunday's Merseyside derby draw and the starting line-up contained only three players - Jamie Carragher, Stewart Downing and Joe Cole - aged over 24. Big-names stars Steven Gerrard and Suarez were left on the bench but it would only be 45 minutes before they were dragged into the action.
It took Swansea a while to find their feet at Anfield but they created the best chances. The away side, who were not short of confidence, finally took their chance in the 34th minute.
Sung-Yeung Ki's low shot was parried wide by Liverpool goalkeeper Brad Jones and Chico beat Sebastian Coates to De Guzman's corner to power home a header.
Rodgers wasted no time in sending for the cavalry, bringing on Gerrard and Suarez for the disappointing Cole and the out-of-his-depth 18-year-old Samed Yesil at half-time. Instantly the hosts were lifted and Jonjo Shelvey fired over just two minutes after the re-start.
Gerrard came closer on the hour, firing a low shot against the post which rebounded to Stewart Downing only for him to miss the target from 12 yards.
Rodgers' final throw of the dice was to send on Raheem Sterling but Swansea were in no mood just to defend their lead and, if anything, they re-doubled their efforts with Jones making three saves in quick succession from Pablo Hernandez, Dyer and Miguel Michu.
That trio applied the finishing blow in the 72nd minute when they caught Liverpool exposed on the counter-attack, the two Spaniards combining for Dyer to score from close range. Liverpool needed a quick response and they got it when Suarez headed in Gerrard's free-kick three minutes later but they could not force another and De Guzman made the result safe deep into added time.