An early Xabi Alonso goal, deflected in off José Bosingwa, was enough to end the run which stretched back to February 2004, and send Rafa Benitez's men top of the Premier League.
It was an entertaining game that afforded few chances to either side, Liverpool's deep-lying midfielders thwarting dominant Chelsea on a wet afternoon.
The Blues' best chance fell to Ashley Cole in the second half, but he was unable to convert substitute Franco Di Santo's nod down.
Luiz Felipe Scolari, suffering his first defeat as Chelsea manager, made just one change from Wednesday's win over AS Roma at the Bridge, with fit again Cole replacing Wayne Bridge at left-back.
For Liverpool, Fabio Aurelio and Dirk Kuyt returned in place of Andrea Dossena and Yossi Benayoun, who were both relegated to the bench.
Prior to kick-off, former Blues Paul Canoville and Ken Monkou were presented to the crowd as a part of the One Game, One Community week of action, and the pair, Chelsea's first black player, and first black Player of the Year, led the sides out on to the pitch.
Visiting captain Steven Gerrard won the toss and opted to switch ends, Chelsea unusually defending the Shed in the first half.
Persistent rainfall made for a greasy surface, and Chelsea almost capitalised as early as the fourth minute when a Xabi Alonso slip let Nicolas Anelka in.
The Frenchman was tackled on the edge of the Liverpool area, and the loose ball fell to Deco, who had space to shoot but his effort was deflected wide.
It was Liverpool who took the lead though, just nine minutes in when Alonso this time benefited from a stroke of luck.
Dirk Kuyt won a flick on, and John Terry's clearing header fell to the feet of the Spaniard 20 yards from goal. Left-footed, he struck tamely, but the ricochet off the body of José Bosingwa was enough to divert the ball past Petr Cech and into the Chelsea net.
Much talk in the build-up to the contest had been on the Blues' unbeaten record, and this was a timely reminder that no side is invincible, even one who had conceded just three times in 12 games prior to this one.
On 14 minutes Kalou had an opening to draw level, the advantage played by referee Howard Webb after Lampard was felled, yet the Ivoirian's shot was poor.
A minute later Alonso was lucky to escape more severe punishment than a free-kick after chopping Kalou down inside his own half.
Liverpool had riled Scolari's men, and when Riera cut inside Bosingwa he could have doubled the lead. However instead of shooting across Cech he opted for the near post, and found the side netting.
Chelsea improvement was needed, and initiative was quickly taken through Bosingwa who crossed for Kalou to head over, but at the other end Gerrard nearly added a spectacular second, his long range volley nearly catching out Cech, who had to tip over in style.
The opening half-hour had been absorbing, if not enjoyable for Chelsea fans. There had been little to cheer, yet the sound levels inside the stadium remained high, urging an equaliser.
On the pitch the players responded with determination, Bosingwa and Ashley Cole continuing to join attacks, while Mikel, Deco and Lampard began to get the upper hand in midfield. The latter saw a shot blocked, while Deco fired just wide from the edge of the box.
Gerrard joined Riera in the book for a lunging tackle on Bosingwa after 38 minutes and that was the last major action of a frustrating first period.
No changes were made at the break as Scolari's men looked to address the deficit. Malouda failed to pick out a man from the left, and then became the first Chelsea player booked as he brought down Alvaro Arbeloa.
The winger nearly made amends shortly after, brought down inside the box by goalkeeper Pepe Reina, but an offside flag was correctly raised.
Scolari opted to change things as time began to tick away, Juliano Belletti and Di Santo were introduced as replacement for wide men Kalou and Malouda, who had enjoyed limited success.
It nearly paid off immediately as Bosingwa crossed, Cole headed square to Di Santo and Lampard shaped to shoot, but Liverpool were able to clear, and Benitez brought on Ryan Babel for Robbie Keane, who had struggled to keep possession against Ricardo Carvalho and Terry.
On 61 minutes, Alonso hit the foot of the post with a curling free-kick that left Cech standing and watching. Most people thought it was in, but Carvalho was alert enough to pounce on the rebound and clear.
By now flowing football had given way to a game of stop-start action, play punctuated by a series of niggling fouls that allowed Liverpool to regain shape and composure, while the pacy Babel made for a dangerous counter-attacking weapon.
It was into the last 20 minutes before Chelsea again entered the Liverpool area. Lampard crossed and Di Santo nodded down into space. The receiver of that ball was probably the wrong man for the job, as Cole, off-balance, sliced wide. It was as good a chance as we had made.
The young Argentine was doing well, consistently winning his headers. Another one eventually ended up with Deco after Belletti had split the defence, and he almost squeezed home a goal, denied only by a last-ditch tackle.
Babel showed his capabilities by almost repeating his goal from the Champions League semi-final back in April, though this time his 30-yard drive was just wide.
Despite these rare breaks, Chelsea were well on top, striving for the goal that would continue the unbeaten streak. Cole and Bosingwa were almost traditional wingers, with Belletti also advanced.
Lampard headed on target with eight minutes to go, but was too far out to trouble Reina. The last throw of the dice from Scolari was to throw on Scott Sinclair for Bosingwa, while Benitez introduced Lucas and Sami Hyypia at the expense of Kuyt and Riera.
This shoring up of the defence was enough to keep the Blues at bay, and so end an 86-game run that started with defeat against Arsenal four-and-a-half years ago.
Now focus turns to the in-form Hull City, who are the opposition on Wednesday night. Watch out for the reaction.
By Andy Jones
Chelsea (4-1-4-1): Cech; Bosingwa (Sinclair 84), Carvalho, Terry (c), A Cole; Mikel; Kalou (Belletti 57), Deco, Lampard, Malouda (Di Santo 57); Anelka.
Goals
Booked Malouda 53, Cole 55, Deco 78
Liverpool (4-2-3-1): Reina; Arbeloa, Agger, Carragher, Aurelio; Alonso, Mascherano; Riera (Hyypia 89), Gerrard, Kuyt (Lucas 87); Keane (Babel 59).
Goals Alonso 9
Booked Riera 21, Gerrard 38, Mascherano 64
