On a bitterly cold day in Liverpool, Rafa Benitez's men continued their dynamic home form despite a battling display against Watford.
The Reds stay third in the table after their latest victory, but credit goes to Aidy Boothroyd's side, who where more than a match for their opponents for most of the game.
It was Watford who had the first meaningful shot at goal. In the 12th minute Darius Henderson hit a 20-yard drive, which was deflected out for a corner.
Liverpool had to wait until the 19th minute for their first shot on goal.
Good work from Jermaine Pennant down the right found Xabi Alonso, but his 25-yard drive was palmed away by Ben Foster in the Watford goal.
In the 23rd minute the reds were at it again, John Arne Riise played a ball to Craig Bellamy whose goalbound shot hit a Watford defender in the face.
But in the 27th minute Watford were almost gifted a goal. Jose Reina sliced a clearance and the ball could well have found the back of his own net.
Bellamy continued to cause the Watford defence problems and almost forced an own goal from Hornets defender Danny Shittu.
The Welsh International burst down the right hand side and whipped in a dangerous cross, which Shittu diverted towards his own goal, but Foster anticipated the effort and pushed the ball to safety.
The best chance of the first half fell to Watford. Reina punched a cross by Ashley Young straight to Hameur Bouazza, but he blazed his effort way over the bar.
Liverpool came out flying after the break and Bellamy put the home side into a deserved lead in the 47th minute.
Dirk Kuyt laid a simple pass to Steven Gerrard and the England ace burst through the middle on one of his trademark runs.
The Watford defence were caught napping and Gerrard played a lovely pass through to Bellamy, who took his time and placed the shot past Foster.
Watford tried to step tings up in the 59th minute after Anthony McNamee replaced Henderson and the away side came close to equalising after good work down the right.
Right-back Adrian Mariappa burst forward to find team-mate Tommy Smith.
The winger whipped in a dangerous cross, which found the head of Young, but the Liverpool keeper was equal to it and tipped the shot over the bar.
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Liverpool made their first change of the game in the 65th minute with Mark Gonzalez replacing Pennant and he almost set up Bellamy for his second of the game.
The Chilean robbed Jordan Stewart in the centre circle and put Bellamy through but his shot was saved once again by the excellent Foster.
The rebound fell kindly to Gonzalez but his header drifted wide of Foster's right-hand post.
Liverpool again went close in the 75th minute and were only denied after a superb stop once again from Foster.
Gerrard whipped in a rasping corner and Jamie Carragher hit a first-time volley, which the keeper tipped over the bar.
Liverpool finally made the game safe in the 88th minute after a 25-yard strike from Xabi Alonso. Kuyt laid the ball off to the Spaniard and Alonso didn't need a second invitation, smacking the ball in the roof of the net.