Liverpool's title challenge already looks in tatters.
Gary Speed buried a disputed free-kick on the half hour and then Ivan Campo headed in a Kevin Davies cross six minutes after half-time on another humiliating day for Reds' keeper Jose Reina.
Bolton jump up to 6th, ahead of Liverpool on goal difference.
Liverpool can perhaps take some solace in the failure of Chelsea to beat Aston Villa. Didier Drogba continued his rich vein of form with a 3rd minute goal but Gabriel Agbonlahor scored just on half-time to level the scores in a game which will perhaps best be remembered for Arjen Robben storming down the tunnel after being substituted. It seems the Martin O'Neill effect is still strong at Villa.
Arsenal kept their hopes alive with a thrilling win at Charlton, who remain second-bottom despite a spirited display. Darren Bent opened the scoring before Robin Van Persie, who could have considered himself lucky to not be sent off after a stamp on Jimmy Floyd Hasselbaink, grabbed a brace, his second being a spectacular volley.
And it was a late, late show that meant Manchester City came away from Everton's fortress Goodison with a point.
Micah Richards hammered home a volley deep into injury time when it had looked like another Andy Johnson goal had given the Toffees victory.
And, in the late game, Sheffield United got their first Premiership win in 12 years with a late goal from skipper Phil Jagielka beating Middlesbrough. Rob Hulse's goal had been cancelled out by Yakubu before Jagielka scored to take Blades out of the relegation zone, level on points with Boro while Charlton sank to rock bottom.