After Manchester United and an out-of-sorts Zlatan Ibrahimovic missed their chance to gain ground in the battle for Champions League places with a wasteful 1-1 draw against Bournemouth, Juergen Klopp's men at last rediscovered some of their old swagger.
Liverpool won only their third game in 13 matches in 2017 with goals from Roberto Firmino, Sadio Mane and Georginio Wijnaldum to move onto 52 points, ahead of Manchester City on goal difference and two clear of Arsenal, who are now fifth.
Chelsea, still the runaway leaders on 63 points, play at West Ham United on Monday while, on Sunday, second-placed Tottenham Hotspur, on 53, host Everton, and Manchester City, 52, visit Sunderland.
Liverpool's Roberto Firmino opens the scoring against Arsenal at Anfield
REUTERSLiverpool produced a dominant first-half performance to take command with goals from Firmino and Mane but Arsene Wenger got his team selection wrong by leaving Alexis Sanchez on the bench.
Forced to bring on his key striker at halftime to chase the game, Wenger saw Sanchez set up a goal for Danny Welbeck before Wijnaldum sealed a deserved Liverpool victory late on.
Arsenal fans show their displeasure following the defeat
REUTERSEarlier, United's League Cup-winning hero Ibrahimovic missed a penalty and 10-man Bournemouth battled to snatch a point in an incident-packed affair at Old Trafford.
United manager Jose Mourinho was left with no complaints after his side again failed to take maximum points from a game they dominated.
After a Marcos Rojo goal was answered by a Josh King penalty in a turbulent first half, United were left sixth on 49 points.
Ibrahimovic, fresh from scoring twice in United's Wembley triumph over Southampton, had a wretched afternoon and not just because his second-half penalty with the score at 1-1 was saved at full stretch by Artur Boruc, who gave an inspired performance.
Just before halftime, the Swede was fortunate not to be dismissed for elbowing Nathan Mings, moments after the Bournemouth defender stood on his head as he lay on the pitch.
In the subsequent fracas, Bournemouth's Andrew Surman pushed Ibrahimovic over and was sent off for this second yellow card offence.
Ibrahimovic denied he had acted out of retaliation.
Mourinho said United were to blame for missing out on three points.
Elsewhere champions Leicester City maintained their dramatic revival under caretaker boss Craig Shakespeare, coming from one-down to beat Hull City 3-1 with goals from Christian Fuchs, Riyad Mahrez and a Tom Huddlestone own goal. It was their second straight win since Claudio Ranieri's sacking.
Hull remain on 21 points, one adrift of Middlebrough, who dropped into the relegation zone after losing 2-0 at Stoke City, while Palace jump to 17th on 25 points.
Dazzling goals from Wilfried Zaha and Andros Townsend provided a 2-0 win at West Bromwich Albion to seal back-to-back successes for Sam Allardyce's Palace.
Swansea's revival under Paul Clement gained more momentum with a 3-2 win over Burney - their fourth victory in six games - as Spanish international Fernando Llorente headed home twice, including a 92nd-minute winner. Swansea are on 27 points, alongside Leicester and Bournemouth.
In the day's best match, Nathan Redmond struck twice and Manolo Gabbiadini scored a sixth goal in four games as Southampton edged Watford 4-3 at Vicarage Road
RESULTSLeicester 3 (Fuchs 27, Mahrez 59, Huddlestone 90-og)
Hull 1 (Clucas 14)
Liverpool 3 (Firmino 9, Mane 40, Wijnaldum 90)
Arsenal 1 (Welbeck 57)
Man United 1 (Rojo 23)
Bournemouth 1 (King 40-P)
Stoke 2 (Arnautovic 29, 42)
Middlesbrough 0Swansea 3 (Llorente 12, 90+2, Olsson 69)
Burnley 2 (Gray 20-P, 61)
Watford 3 (Deeney 4, Okaka 79, Doucoure 90+4)
Southampton 4 (Tadic 28, Redmond 45+2, 86, Gabbiadini 83)
West Brom 0 Palace 2 (Zaha 55, Townsend 84)
POINTS TABLETeams P W D L GD
PtsChelsea 26 20 3 3 36
63Tottenham 26 15 8 3 32
53Liverpool 27 15 7 5 24
52Man City 25 16 4 5 22
52Arsenal 26 15 5 6 24
50Man Utd 26 13 10 3 17
49
Liverpool's Roberto Firmino opens the scoring against Arsenal at Anfield REUTERSLiverpool produced a dominant first-half performance to take command with goals from Firmino and Mane but Arsene Wenger got his team selection wrong by leaving Alexis Sanchez on the bench.
Forced to bring on his key striker at halftime to chase the game, Wenger saw Sanchez set up a goal for Danny Welbeck before Wijnaldum sealed a deserved Liverpool victory late on.
Arsenal fans show their displeasure following the defeat REUTERSEarlier, United's League Cup-winning hero Ibrahimovic missed a penalty and 10-man Bournemouth battled to snatch a point in an incident-packed affair at Old Trafford.
United manager Jose Mourinho was left with no complaints after his side again failed to take maximum points from a game they dominated.
After a Marcos Rojo goal was answered by a Josh King penalty in a turbulent first half, United were left sixth on 49 points.
Ibrahimovic, fresh from scoring twice in United's Wembley triumph over Southampton, had a wretched afternoon and not just because his second-half penalty with the score at 1-1 was saved at full stretch by Artur Boruc, who gave an inspired performance.
Just before halftime, the Swede was fortunate not to be dismissed for elbowing Nathan Mings, moments after the Bournemouth defender stood on his head as he lay on the pitch.
In the subsequent fracas, Bournemouth's Andrew Surman pushed Ibrahimovic over and was sent off for this second yellow card offence.
Ibrahimovic denied he had acted out of retaliation.
Mourinho said United were to blame for missing out on three points.
Elsewhere champions Leicester City maintained their dramatic revival under caretaker boss Craig Shakespeare, coming from one-down to beat Hull City 3-1 with goals from Christian Fuchs, Riyad Mahrez and a Tom Huddlestone own goal. It was their second straight win since Claudio Ranieri's sacking.
Hull remain on 21 points, one adrift of Middlebrough, who dropped into the relegation zone after losing 2-0 at Stoke City, while Palace jump to 17th on 25 points.
Dazzling goals from Wilfried Zaha and Andros Townsend provided a 2-0 win at West Bromwich Albion to seal back-to-back successes for Sam Allardyce's Palace.
Swansea's revival under Paul Clement gained more momentum with a 3-2 win over Burney - their fourth victory in six games - as Spanish international Fernando Llorente headed home twice, including a 92nd-minute winner. Swansea are on 27 points, alongside Leicester and Bournemouth.
In the day's best match, Nathan Redmond struck twice and Manolo Gabbiadini scored a sixth goal in four games as Southampton edged Watford 4-3 at Vicarage RoadRESULTSLeicester 3 (Fuchs 27, Mahrez 59, Huddlestone 90-og) Hull 1 (Clucas 14)Liverpool 3 (Firmino 9, Mane 40, Wijnaldum 90) Arsenal 1 (Welbeck 57)Man United 1 (Rojo 23) Bournemouth 1 (King 40-P)Stoke 2 (Arnautovic 29, 42) Middlesbrough 0Swansea 3 (Llorente 12, 90+2, Olsson 69) Burnley 2 (Gray 20-P, 61)Watford 3 (Deeney 4, Okaka 79, Doucoure 90+4) Southampton 4 (Tadic 28, Redmond 45+2, 86, Gabbiadini 83)West Brom 0 Palace 2 (Zaha 55, Townsend 84)
POINTS TABLETeams P W D L GD PtsChelsea 26 20 3 3 36 63Tottenham 26 15 8 3 32 53Liverpool 27 15 7 5 24 52Man City 25 16 4 5 22 52Arsenal 26 15 5 6 24 50Man Utd 26 13 10 3 17 49