Kenny Dalglish's Reds managed to qualify for their 14th final where they will meet the winners of tomorrow's London derby between Chelsea and Tottenham on May 5 for a chance to win their eighth FA Cup.
Liverpool have now not lost an FA Cup semi since 1990 thanks to goals from Man of the Match Luis Suarez and Britain's most expensive player Andy Carroll in the second half after Nikica Jelavic had put the Toffees ahead inside 25 minutes.
After a fairly cagey beginning, the match kicked into gear when Jelavic pounced on a poor defensive error from Jamie Carragher to slot home past a helpless Brad Jones. Carragher and Daniel Agger got in a mess after Jelavic's header landed at the top of the box with the former finally deciding to hoof it clear but instead it hit an unsuspecting Tim Cahill and fell for the Croatian striker to slide home.
Liverpool had been the better of the two sides after the opening goal and deserved a leveler in the 62nd minute when Luis Suarez ran onto a horrendous backpass from Sylvain Distin. The veteran Frenchman inexplicably went to pass it backwards way over on the right flank when the line would have sufficed with the Uruguayan nipping in to take possession before advancing into the area and popping it past Tim Howard with the outside of his foot to make it 1-1.
It was a battle of attrition for the next little while as neither side were keen to make any more costly mistakes after errors led to both goals but it was a free-kick which caused the winner with Carroll heading home much to the delight of the travelling Anfield army. Craig Bellamy's dead ball just outside the area from the left side was met by the big striker whose glancing header rifled past Howard who could do nothing after his defenders let him down with poor marking.
Earlier, Howard was able to keep out Martin Skrtel's 14th minute effort after Carroll's knockdown header before Jelavic gave Jones a sighter with an attempted overhead for Everton's first chance of the contest in the 21st minute.
Two minutes into the second half, Carroll produced a glaring miss when he headed unmarked at the back post from Stewart Downing's rightwing cross but could not get his effort on target before Suarez was close to turning in at front post from another Downing low cross just moments before his equaliser.
With just over ten minutes left, Carroll lashed wide from the top of the area after getting around his marker a few minutes before Jelavic stabbed wide after a neat flick-on from Marouane Fellaini.
Carroll then finally got one on target and it was the most important one of the day a couple of minutes prior to substitute Maxi Rodriguez having a great chance to wrap it up when his effort from Suarez's cutback slammed into the upright.
In the end, however, it was the Reds who came shining through after a poor start and they now have the opportunity to grab a second piece of silverware after clinching the Carling Cup in February.
TRIBAL ASKS: Will winning the FA Cup final save face for Liverpool who have underperformed in the Premier League this season?
FA Cup semi-final
Wembley Stadium, London - 87,231