Match ends, Liverpool 1, Leicester City 0.
Leaders Leicester saw their nine-match unbeaten Premier League run ended by Liverpool substitute Christian Benteke's second-half winner.
The Reds dominated the first half at Anfield, but failed to fully test Foxes keeper Kasper Schmeichel.
They were rewarded when Roberto Firmino's pull-back from the left was steered in by a stretching Benteke.
Leicester offered little threat, Nathan Dyer going closest as they failed to score for the first time this season.
Festive woe for Foxes
Leicester spent Christmas Day on top of the Premier League, capping a marvellous turnaround after being bottom of the table 12 months ago.
Their first league defeat since losing 5-2 at home to Arsenal on 26 September left them vulnerable to be overtaken by the Gunners later on Saturday.
But Arsene Wenger's men failed to capitalise after a 4-0 loss at Southampton, meaning the Foxes are still two points clear at the summit.
Can Claudio Ranieri's side react positively to defeat? That's the question many sceptics have been asking about the surprise leaders.
After a toothless display at Anfield, where they managed just three shots on target, Leicester will have to improve dramatically if they are to maintain their lofty position.
"We have to clean this result away and restart," said Ranieri afterwards.
Vardy and Mahrez fail to shine
Two of the brightest stars in Leicester's resurgence have been England striker Jamie Vardy and Algeria playmaker Riyad Mahrez.
The two men have contributed 29 of Leicester's 37 Premier League goals this season, as well as providing 10 assists for each other or their team-mates.
But neither made an impact against Liverpool, with Ranieri revealing afterwards that Vardy played with a fever and Mahrez was "very tired".
As a team, Leicester lacked their usual energy and managed to muster just seven attempts at the Liverpool goal.
Belgian pair boost the Reds
Liverpool's revival under Jurgen Klopp has showed signs of slowing down in recent weeks, with the Reds picking up just one point in their three previous Premier League matches.
Following the 3-0 defeat at Watford, Klopp decided to recall Belgium striker Divock Origi to provide more pace and movement as the focal point of his attack.
Origi's speed caused problems for the Leicester defence in the opening half an hour, as the hosts began at a brisk tempo.
But a hamstring injury curtailed Origi's afternoon, meaning his international colleague Benteke was summoned from the bench.
Benteke, a £32m summer signing from Aston Villa, had not scored a Premier League goal in six appearances and wastefully headed over an early second-half opportunity.
However, he clinically finished when it mattered - sliding in the winner as Liverpool moved up to eighth.
Man of the match - Jordan Henderson
Liverpool manager Jurgen Klopp: "After four games with no result, that was very important today. Everybody knows of the quality of Leicester and what we had to do today was play simple football.
"The first half was really good and then we had to change. Christian Benteke was not warm, it's not easy to come into the game.
"We made the goal, it was a brilliant situation where the boys showed their quality in small situations. We were never really under pressure."
Leicester manager Claudio Ranieri: "We started to play too late. Liverpool pushed from the beginning and for this reason they deserved to win.
"We tried to do our best but maybe in the first half we were too nervous to play our football. The second half was much better."
Another big match for the Foxes - the visit of third-placed Manchester City on Tuesday. Liverpool return to action on Wednesday, when they travel to struggling Sunderland.
The stats you need to know
- Liverpool are unbeaten in their past seven league games against the Foxes, winning five and drawing two.
- The Reds are also unbeaten at home in the Premier League on Boxing Day, winning six and drawing three.
- Claudio Ranieri's side lost their first away match of the season, last losing on the road in the Premier League in March (4-3 at Tottenham).
- Christian Benteke scored his first Premier League goal since Liverpool's 3-1 win against Chelsea in October.
- Leicester have won just one of their past 11 top-flight Boxing Day fixtures, drawing three and losing seven.
- Liverpool kept their first clean sheet in the Premier League since November, having conceded at least twice in each of their last three fixtures before Saturday.
- 23CanBooked at 52mins
- 20LallanaBooked at 45minsSubstituted forAllenat 90+3'minutes
- 10CoutinhoSubstituted forLeivaat 90+1'minutes
- 27OrigiSubstituted forBentekeat 38'minutes
- 4K Touré
- 53Vilaca Teixeira
- 6HuthBooked at 62mins
- 26MahrezSubstituted forKramaricat 80'minutes
- 20OkazakiSubstituted forDyerat 69'minutes
- 9VardySubstituted forUlloaat 69'minutes
- 2de Laet
- Martin Atkinson
- Shots on Target
Second Half ends, Liverpool 1, Leicester City 0.
Attempt missed. Andy King (Leicester City) header from the centre of the box is too high. Assisted by Marc Albrighton with a cross.
Offside, Liverpool. Christian Benteke tries a through ball, but Lucas Leiva is caught offside.
Attempt blocked. Christian Benteke (Liverpool) right footed shot from the centre of the box is blocked. Assisted by Roberto Firmino.
Substitution, Liverpool. Joe Allen replaces Adam Lallana.
Substitution, Liverpool. Lucas Leiva replaces Philippe Coutinho.
Foul by Christian Benteke (Liverpool).
Nathan Dyer (Leicester City) wins a free kick in the attacking half.
Corner, Leicester City. Conceded by Emre Can.
Attempt blocked. Andy King (Leicester City) right footed shot from the centre of the box is blocked. Assisted by Christian Fuchs.
Attempt missed. Roberto Firmino (Liverpool) left footed shot from the left side of the box misses to the right.
Foul by Nathaniel Clyne (Liverpool).
Nathan Dyer (Leicester City) wins a free kick in the defensive half.
Attempt missed. Philippe Coutinho (Liverpool) right footed shot from outside the box is just a bit too high. Assisted by Roberto Firmino.
Offside, Liverpool. Simon Mignolet tries a through ball, but Christian Benteke is caught offside.
Substitution, Leicester City. Andrej Kramaric replaces Riyad Mahrez.
Offside, Leicester City. Marc Albrighton tries a through ball, but Robert Huth is caught offside.
Foul by Dejan Lovren (Liverpool).
Leonardo Ulloa (Leicester City) wins a free kick in the attacking half.