Under Kenny Dalglish, the Reds took an early lead when Fernando Torres struck from a tight angle in the 3rd minute but Ian Holloway's men rallied to restore parity less than ten minutes later through former Liverpool youth player Gary Taylor-Fletcher.
The Tangerines stepped things up after half-time and managed to hit the lead with just over 20 minutes remaining when DJ Campbell headed home from close range.
It proved to be enough for Blackpool to record all three points and move up to ninth on the table as the Reds woes continued, dropping to 13th with their tenth defeat of the season.
GOAL Torres' goal came when he was played through by Martin Kelly on the right before taking one touch in the box and the slamming it high past Richard Kingson from an angle to kick things off for the Reds.
GOAL But the lead didn't last long as Taylor-Fletcher received a through ball, taking a lovely first touch, then advancing into the area to slot past Reina with finesse.
Campbell headed slightly wide from close range later in the opening half whilst Taylor-Fletcher tried his luck with a lob from the right wing.
In the second term, the Reds had a few half chances but it was the Seasiders who were able to hit the front in the 69th minute. GOALIan Evatt headed Neil Eardley's cross into the goalmouth where Campbell had evaded all defenders and put it home with a diving header to give his side the lead.
Liverpool did not seem to be pushing too hard for an equaliser and it proved to be the downfall as they yet again walked away with no points in their pocket.