Adam Lallana fired the Reds ahead on 26 minutes to get the celebrations underway, but Jason Puncheon equalised with a free kick to level matters before the break.
Wilfried Zaha, with his very first touch, tapped the visiting side into the lead on the hour mark, before Glenn Murray tapped home the rebound from his missed penalty late on to seal the points.
Below, relive Sports Mole's detailed coverage of an emotional encounter for the legendary midfielder in his final game in front of the Kop.
Good evening ladies and gentlemen and welcome to our live commentary of Liverpool's visit of Crystal Palace on a very, very, very special day on Merseyside. Anfield loses one of its favourite sons this evening my friends as Steven Gerrard prepares to make his last appearance in front of the Kop following a legendary 17-year spell. Incidentally, it's also Glen Johnson's final game here probably, and we'll be uploading a Vine of his best bits a little later.
Tissues? Check. Embed code for Time to Say Goodbye by Andrea Bocelli? Check. Onion, to pretend that's the reason behind the tears? Check. Yep, it's the end of an era here this evening folks, as the iconic Gerrard bids farewell to his adoring fans in what has been a magnificent career in England. Truly brilliant.
Unlike Johnson - who is genuinely leaving, but nobody really cares - we don't have time to bring you Gerrard's best bits by virtue of his amazing career here, but we'll be reminding ourselves of the reasons why he is so highly thought of on these shores with one or two clips, before the man himself touches the 'This is Anfield' sign one last time.
I suppose we should see if the man of the moment is even playing? I can confirm that he is, but before we have a full look at the teams why not check out what the lads down at Sports Mole HQ have had to say on this one? Go on sure.
Right, let's start with the visitors, because it's polite, and I can tell you that Mr Alan Pardew makes FIVE changes from his side's 2-1 defeat to Man United last week.
Firstly, Wayne Hennessy replaces Julian Speroni between the sticks, while Martin Kelly comes in for Damien Delaney at centre-half. Then, you've got Lee Chung-yong coming into midfield for his full debut to replace Mile Jedinak, with Jason Puncheon also replacing Wilfried Zaha on the flank. Finally, Marouane Chamakh comes in for Glenn Murray to spearhead the attack!
On to Liverpool now and Brendan Rodgers makes two changes from the draw at Chelsea last time out, and it's cruel from the Northern Irishman as he benches Johnson for Alberto Moreno at left-back, while Jordan Ibe comes in for Rickie Lambert - another one who probably won't be here next season.
After benching Lambert and Johnson on perhaps their Anfield swansongs, something tells me Rodgers will be slashing the tyres of people's wheelchairs and de-caning blind people on his way home tonight. He's in that sort of mood it seems.
Fans of most teams would like a bit of a thrill come the business end of the season, but Palace supporters, who watched their side flirt with relegation prior to Pardew's arrival at Selhurst Park, will have no complaints this season.
It's been a season rife with instability, with Neil Warnock failing to reverse the damage of Tony Pulis's sudden departure a matter of DAYS before the season kicked off. The Eagles sat 18th when Warnock was sacked at the start of the year, but cometh the hero as Pardew, who also played for the club, returned and now everything seems a-ok for the moment.
Incidentally, Pardew was here at Anfield 24 years ago when Palace last won away to Liverpool - a 3-2 win back in 1991. There's a pointless bit of trivia for you. They come into this on the back of a four-match losing streak, and how cruel would it be for them to end that barren spell and spoil Gerrard's send-off?
We're getting closer to an occasion that promises to produce more tears than Raheem Sterling on laughing gas, and cause more goosebumps than a 10-year-old's book collection in 1999. 15 minutes until the beginning of the end, my friends.
I should point out that I'm an Arsenal fan, but supporters of English football everywhere may just be struck by a lump in their throat this evening - or they may be hoping that he slips or something cynical. That's what Demba Ba and that DJ are wishing right about now. Shame on them.
Gerrard, being the type of player he is, has won three League Cups, Two UEFA Super Cups, two FA Cups, but it was that Champions League win in Turkey that he will be remembered for.
I wish I could be there tonight! I know Stevie gets the farewell he deserves. Ynwa pic.twitter.com/gpgd1dAgdl
— Daniel Agger (@DanielAgger) May 16, 2015
Aaaaaaaaaaaand here he is. Gerrard emerges from the tunnel and is greated by his song, being sung by all four corners of Anfield. No sign of tears yet, but wait until the final whistle. I actually forgot we've got a match to cover now. I was about to log off.
KICKOFF: Aaaaaaaaaaaaaaaaand we're off at Anfield. Gerrard has 90 more minutes at Anfield, folks. Let's hope the football gods are kind to him. Let's go.
There's a real carnival atmosphere at Anfield as you might imagine and the home fans haven't stopped singing. Let's hope they keep this up. On the pitch, there's little to report thus far.
We've seen our first sign of Philippe Coutinho as the little Brazilian tries to weave a little bit of magic, but his cross is blocked and goes for a corner, which comes to nothing.
Good work by Alberto Moreno there as he prevents Bolasie from racing through on goal with Mignolet. Palace scoring first would be a horrible incident for the hosts, wouldn't it? We can't rule it out. Liverpool have been quite inconsistent this season and victory isn't really a foregone conclusion here.
Palace fans refuse to stay quiet, singing "super Alan Pardew" and, to be fair, he's earned that title for his work in his brief spell with the club thus far. They look to end a four-game losing streak here, however. But they're safe so it doesn't matter what happens really, does it?
Skrtel wants a corner and what Skrtel wants he usually gets, because he's Slovakian and scary, but not this time as referee Jonathan Moss awards a goal kick instead. The Liverpool man might've had a point to be fair.
Good take by Mignolet here as he plucks Puncheon's dangerous cross out of the sky. Palace have looked decent enough going forward at times, so that's something to be wary of.
How tall do Liverpool players think Raheem Sterling is? He looks about 5'7 at best, yet that hasn't stopped Adam Lallana from fizzing in cross after cross as if Rickie Lambert was in there.
Brilliant skill from Puncheon to release Joel Ward down the right wing, but his cross is a shocker. He hits it far too hard and it flies over the head of everybody. That might've been an opportunity for Palace you know.
CLOSE! This isn't far away at all, and sorry Pool fans but it's for Palace, as Bolasie shrugs off Can's tame challenge before firing at goal, but his effort deflects off Skrtel and bounces agonisingly wide. One or two wake-up calls for Liverpool in recent minutes.
Chamakh goes down and wins a free kick from Lovren's high foot. The Morocco international is fine and, most importantly, so is his hair. It must've taken about a month to style.
Oh Martin Kelly what are you doing here pal? Kelly, on his return to Anfield, plays a slack pass that is pounced on by Lallana, who races through with Wayne Hennessy and finishes competently past the Welshman. That'll settle Liverpool down after a nervy last few minutes.
CHANCE! Should be 1-1. Simple as. Bolasie gives Moreno a rough ride down the left-hand side before his cross-come-shot falls to Ledley at the edge of the box, but the former Celtic man drills high and wide, much to the delight of the Liverpool fans. Big chance.
CHANCE! Another chance for Palace, as the ball falls to Bolasie on the edge of the box, but he's leaning back and his effort follows Ledley's out of the stadium. Probably.
CHANCE! Good lord Palace are well on top here, and Lee Chung-yong, on his full Crystal Palace debut, has a glorious chance to equalise but he side-foots over the bar. This is bizarre. Palace should be leading.
This sounds bizarre, but if you offered Liverpool 1-0 now they'd rip your hand off. Palace have had that many chances to equalise - and it's probably only a matter of time before they do.
Five minutes to the break then and Liverpool, somehow, are still leading this 1-0 in a first-half that has seen the visitors fluff a host of good chances. Yannick Bolasie is a nightmare as Palace's striker today. I mean that in a good way. Pardew's gamble in playing Martin Kelly at centre-half didn't pay off, but playing Bolasie up front is looking a good move thus far.
It's nothing less than they deserve to be fair, as Jason Puncheon, who scored against Manchester United last week, curls a fine left-footed effort past the helpless Mignolet into the corner of the net. Fine goal.
Palace deserve this half-time lead. Puncheon cancelled out Lallana's opener in a first half that the visitors have dominated in terms of chances to be fair. They've been the better team and they have a good chance of spoiling Gerrard's farewell.
RESTART: Aaaaaaaaaaaaaaaand we're back underway, my friends. Palace, who dominated that first half basically, will be determined to spoil Gerrard's Anfield send-off. Let's go.
PENALTY APPEALS: Two penalty appeals in the space of about two seconds here, as Skrtel perhaps handled Bolasie's cross, before Lee goes to ground under Skrtel's challenge but Moss is having none of it. They both looked good cases to me.
CHANCE! Another good chance for Lee Chung-yong, and it's brilliant work from Bolasie, who lets Ward's ball go through his legs before playing in the South-Korean, whose left-footed strike from an angle flies wide.
Bolasie's been brilliant today. He's such a handful and I fancy him to get on the scoresheet at least once. He looks a man on a mission this afternoon in that unfamiliar central role up front.
CLOSE! Better from Liverpool as the ball comes to a red shirt on the edge of the box. Anfield holds its breath for a split second in the belief - and perhaps hope - that it is Gerrard, but it's Henderson, who drills wide. Oh well.
Would you believe it? Zaha, with his very first touch, taps into an empty net following good work from Bolasie again. Amazing. It's set up for Gerrard, isn't it? He's playing too deep to have that kind of impact in the final third any longer. Can Henderson not swap places with him for the last half-hour or something?
SUBS: Now then this is very, very interesting. Lucas Leiva and Rickie Lambert replace Lallana and Ibe, and it's Lucas's arrival that could perhaps allow Gerrard play in a more advanced midfield role. Come on Stevie. Do it for old time sake.
Liverpool well on top but they're toiling in the final third. They need a killer ball. They need creativity. They need Gerrard, in actual fact, but it remains to be seen if he will save them one last time.
SHOT! The script is written for Gerrard to curl home this free kick, but his effort flies over. Normally there'd be groans around the stadium, but not today, not when Gerrard would be the subject.
Five minutes left now and Liverpool will fizz a free kick into the mix now after Sterling was fouled by Puncheon, but it comes to nothing. Palace have been brilliant defensively.
Two minutes to play now my friends and, as it stands, Palace are going to spoil Gerrard's send-off - not unless the man himself can influence things and be Liverpool's hero one last time.
That's that, my friends. Mignolet saves Glenn Murray's intial penalty, but he's on hand to tap home the rebound from close range. No fairytale finish for Gerrard unfortunately.
That's that, my friends. Gerrard, obviously a little emotional, congratulates the Palace players, who congratulate him on a fantastic Liverpool career in turn.
You can tell he's fighting back tears like never before and he disappears into the tunnel for the time being, along with his teammates, but he'll be back to speak to the fans a little later.
Well, he doesn't ride off into the sunset on the back of an Anfield win, but still, the occasion was always far bigger than the result on a day where defeat meant little to both sides.
Speaking of riding off into the sunset, that's all from me this evening, my friends. I'll be back with analysis and rating shortly, but it's goodbye for now.
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