Rafael Benitez masterminded another magnificent European away triumph as Liverpool confounded the odds with a stunning victory in the Bernabeu.
Whatever the Liverpool manager's future is after months of rumours, he did his cause no harm at all thanks to Yossi Benayoun's headed winner.
Benitez has coached Liverpool to remarkable performances away to Juventus, Barcelona, Arsenal, Inter Milan and Chelsea in recent seasons in the Champions League, but this was by far the most impressive.
Real have been rampant of late and unbeaten this year, but Liverpool dug deep and Benayoun headed the late winner to give his side every chance of progressing to the quarter-finals.
Despite days of intensive treatment, Steven Gerrard did not make the starting XI, the midfielder initially left on the bench.
It meant Jamie Carragher captained the side with Benayoun on the right of midfield and Dirk Kuyt pushed forward in support of Fernando Torres.
Gerrard's absence was a bad blow but confirmed how Benitez would play the first leg. Contained defence, a combative and mobile midfield and hard running were the order of the day.
In the opening exchanges there was a calmness about Liverpool in this intimidating arena, five tiers of fervent passion pouring down in support of Real.
They defended with discipline and long before the break Real were trying their luck from distance.
The Spanish champions, who had scored 10 goals in their last two games, still had their moments.
Arjen Robben's pass gave Raul the chance of a shot on the turn held by Jose Reina, while Brazilian Marcelo also tested the goalkeeper.
And it took a fine saving tackle by Carragher on Gonzalo Higuain to snuff out another dangerous moment. But the longer the game went on, the more Liverpool seemed in control defensively.
It also saw them coming out on the break and Torres should have done better after 20 minutes as he was allowed to run onto a Reina long clearance, but Iker Casillas palmed away a shot across the face of the goal.
Casillas then got a firm block on Benayoun close-range shot as Liverpool sought to snatch something from a period of growing confidence.
Higuain thought he had scored with a close-range header, only to be rightly penalised for offside, before Marcelo and Robben, twice, tried their luck unsuccessfully from outside the box.
Real had most of the possession but it was Spanish international Xabi Alonso who almost broke the deadlock with an audacious shot from inside his own half.
The midfielder is famous for such effrontery, once scoring a similar goal at Luton, but this time Casillas had to scramble back to touch the effort over the bar.
Madrid sent on Guti for Marcelo at the break, with Fabio Cannavaro booked for a foul on Dirk Kuyt soon after the restart.
Liverpool had not allowed Real to indulge themselves with the expansive game that has swept so many aside of late. Javier Mascherano's snap and drive in midfield was the yardstick for others to follow.
Torres, kept under close control by Cannavaro, was booked for a swipe at Lassana Diarra's ankles, the game now stretched as both sides searched for the vital breakthrough.
Benitez, never one to be bothered about reputations, then replaced a disappointing Torres with Ryan Babel after 62 minutes, to predictable derision from the home fans at the former Atletico Madrid man.
Mascherano was next into the book for a foul on Fernando Gago, Reina yet to have a serious shot to save in the half.
That was to come after 70 minutes when Reina touched over a dipping drive from Robben, Madrid starting to show more urgency as the minutes ticked away.
However, Liverpool were still comfortable and things got even better with eight minutes left.
Gabriel Heinze's foul on Kuyt gave Fabio Aurelio the opportunity to curl in a free-kick that Benayoun headed past Casillas from six yards.
Benayoun was engulfed by his jubilant team-mates and way up above them, 3,000 Liverpool fans erupted.
Albert Riera was booked, and then taken off injured, allowing Gerrard into the fray with three minutes left and Lucas replaced Kuyt in the final seconds, the game now won.Reuse content