Saints scored three times in the second half, including two late goals, to stun the visitors and gain some revenge for the 6-1 home defeat they suffered at the hands of the same opposition in the League Cup earlier in the season.
The introduction of Sadio Mane in the second half turned the game on its head, with the Sengalese forward bagging a brace, while Graziano Pelle grabbed the equaliser.
Liverpool would have overtaken Saints in the table with a victory, but as it stood at full-time the south coast club were sat in seventh on 47 points from 31 games played, with the Reds ninth on 44 from 29.
How Liverpool will rue letting slip a two-goal lead from a match they could have won comfortably, having opened the scoring through Philippe Coutinho on 17 minutes.
Fresh from his decisive contribution against Manchester United in the Europa League, the Brazilian cut in from the left and curled a right-foot shot past Fraser Forster.
Jurgen Klopp’s team appeared buoyant in attack and four minutes later Sturridge doubled the Reds lead.
Receiving the ball from Divock Origi, on the right-hand side of the box and with Ryan Bertrand in attendance, the England striker worked the ball on to his left foot and finished with aplomb.
It should have been 4-0 before half an hour was up, but Forster stuck out a leg to thwart Joe Allen in a one-on-one, and Sturridge wasted another good chance moments later.
On 33 minutes Allen thought he had scored with a drilled shot that flew into the back of the net, but his strike was ruled out for offside, with Mamadou Skaho still loitering in the six-yard box following a corner.
At half-time and lucky to only be 2-0 behind, Saints boss Ronald Koeman brought on Victor Wanyama and Mane for Jordie Clasie and Dusan Tadic, with Martin Skrtel replacing Dejan Lovren for Liverpool.
Skrtel’s impact was immediate, but for all the wrong reasons as far as Liverpool were concerned.
The Slovakian was penalised for a shirt pull on Pelle, but Simon Mignolet saved Mane’s spot-kick.
It could have been a turning point, but Southampton began to crank up the pressure, and Mane made amends with Saints’ first on 64 minutes.
Liverpool gave the ball away in midfield and Pelle played in Mane to fire past Mignolet. Suddenly it was game on.
Klopp responded by taking off Sturridge and bringing on Christian Benteke, but the maligned Belgian striker missed a decent chance after 75 minutes, shooting wide from a promising position.
Eight minutes later a fantastic strike from Pelle levelled matters and, with their tails up, Saints would soon be in front.
A strange clearance from Mignolet was sent high but not far down the pitch and, from the ensuing melee Mane, applied the finishing touch to send Ronald Koeman charging down the touchline.
European football could yet beckon for both of these clubs next season, and this result keeps the battle for qualification in the balance.