Jurgen Klopp's selection gamble backfired as Ruben Neves' stunning strike dumped a second-string Liverpool out of the FA Cup at Molinuex.
The Portuguese's second half effort sent Wolves into the fourth round with a 2-1 win, after Divock Origi's effort had cancelled out Raul Jimenez's opener.
Nuno Espirito Santo named a strong Wolves line-up while Klopp made nine changes to his Liverpool side, handing full debuts to Curtis Jones and Rafael Camacho, with Brazilian Fabinho forming a makeshift central defensive partnership with Dejan Lovren.
However, that plan went out of the window when Lovren was forced off just six minutes in, to be replaced by 16-year-old Ki-Jana Hoever, who became the club's youngest player in FA Cup history.
The first half was a largely drab affair, with the visitors lacking fluency in an unfamiliar 4-4-2 formation and struggling to get forward pair Daniel Sturridge and Origi in the game.
It took until the 38th minute for the deadlock to be broken, when James Milner miscontrolled in midfield, allowing Jimenez to race clear from halfway and finish superbly past Simon Mignolet.
Five minutes after the break, Liverpool finally created something meaningful in attack, and when Milner's blocked shot fell to Origi he lashed a sensational effort past John Ruddy from the edge of the box.
They were level for just four minutes though, before Neves' magnificent dipping strike whistled in past Mignolet at the near post.
Xherdan Shaqiri almost matched him with a wondergoal of his own, only to see Ruddy get the faintest of touches to tip his free-kick onto the woodwork.
Klopp turned to Mo Salah and Roberto Firmino from the substitutes bench to try and salvage the tie but it wasn't enough, and the Reds will now have to win either the Premier League or Champions League to avoid another season without a trophy.
