Liverpool's Champions League run came to an end in the Athens Final against AC Milan, but that will not overshadow the outstanding tournament they played.

Liverpool started the Group Stage with a 0-0 draw against PSV Eindhoven, then they rattled off four straight wins, one against Galatasaray, two against Bordeaux, and one against PSV, before losing the group stage finale to Galatasaray with their second team, after they had already clinched first place in their group.

Liverpool got a very tough draw for the first knockout stage, playing defending champion Barcelona. Liverpool went to the Nou Camp in Barcelona for the first leg, a stadium in which no English team had won in over twenty years. Liverpool lost 1-0 in the second leg at Anfield but advanced based on away goals.

The second knockout stage saw Liverpool to a rematch with their group opponents PSV, Liverpool blew PSV away with wins of 3-0 and 1-0 to advance to the semifinals and a meeting with Premiership rivals Chelsea.

Liverpool lost 1-0 to Chelsea in the opening leg away at Stamford Bridge. They played poorly overall and were lucky to only give up one goal. The second leg at Anfield saw Liverpool play inspired football backed by their enthusiastic home fans. Daniel Agger scored off a free kick in the twenty second minute to even the aggregate score ar 1-1. The game was scoreless in the rest of regulation and then in the thirty minutes of extra time, causing the game to be forced to be decided on penalty kicks. Pepe Reina was spectacular in goal during the PK shootout, he stopped 3 of Chelsea's five penalty kicks. Bolo Zenden, Xabi Alonso, Steven Gerrard, and Dirk Kuyt all scored for Liverpool during the shootout, giving the Reds the win 4-2, and sending them to the finals against AC Milan.

The final against AC Milan in Athens saw Liverpool dominate possession and scoring chances, but fall behind 2-0 on flukey goals by Filippo Inzaghi, they were unable to recover, although they did get a goal from Dirk Kuyt late in the second half, they could not find an equalizer. The final score was AC Milan 2, Liverpool 1.