Liverpool manager Arne Slot said Crystal Palace were deserving 2-1 winners as the Premier League champions' perfect start to the season came to an abrupt end at Selhurst Park.
Slot's men had won all seven of their Premier League, Champions League and League Cup games since losing on penalties to Palace in the Community Shield last month.
However, a new-look Liverpool, overhauled by a near £450 million spend in the transfer market, have flirted with failure only to be bailed out by a series of late goals.
Ismaila Sarr's ninth-minute opener was scant reward for a dominant first half from Palace as only a string of saves from Alisson Becker kept the visitors in the game.
It looked like Liverpool might escape south London with a point after Federico Chiesa levelled with another late goal.
But this time the Reds were undone in stoppage time when Eddie Nketiah smashed in.
"If one team deserved to win today it was Palace," said Slot.
"Credit to Palace - with the Community Shield it's not the first time we've lost to them.
"They deserved to be two or three up in the first half."
Including the Community Shield, Liverpool have conceded two goals in five of their nine games this season.
Slot was particularly angered by his side's defending for the winner when Jeremie Frimpong switched off to leave Nketiah unmarked at the back post.
"We can only blame ourselves for defending the way we did," said Slot.
"One of our players ran out because he wanted to play a counter-attack, which was of no use because time was up, so it was only about defending.
"One player was too offensively minded in that moment, which led to them scoring the winner and us losing the game."
Palace are the only unbeaten team left in the Premier League.
Stretching back to before their FA Cup win last season, the Eagles have not lost in 18 games in all competitions.
"These are the moments why we love football. The fans will have a great Saturday evening now," said Palace boss Oliver Glasner.
"We deserved it. Great performance, great game, great win."
Glasner has transformed Palace's fortunes over the past 18 months, but believes his side's first-half display was a new high.
"I think the first half was the best half since we arrived," he said.
"Leading the champions by one goal you always think they can strike back and we were under immense pressure in the second half.
"But even when they equalised and the momentum can change we kept our heads. It was such a team effort."