Brendan Rodgers’ side are top of the Premier League form standings since the turn of the year after taking 20 points from a possible 24 and are up to fifth in the table, above Southampton.
After netting a scintillating opening goal last week against Saints, Coutinho was at it again at Anfield on Sunday, curling home a majestic effort from 20 yards with 15 minutes left to play.
Jordan Henderson had given Liverpool a first-half lead with an equally brilliant strike on 11 minutes before Edin Dzeko rounded off a fantastic team move to equalise 14 minutes later.
Despite both sides’ European exertions in midweek, the pace of the game was frenetic throughout and Adam Lallana had two goals disallowed for the hosts while Sergio Aguero hit the post for City, who remain five points behind Chelsea in the title race. The Blues now have a game in hand.
Both teams made fast starts but it was Liverpool who crafted the better early chances, with Lallana heavily involved.
The England international drew a save from Joe Hart with a low toe-poked shot after eight minutes and then had a goal disallowed for offside 60 seconds later after brilliantly controlling Raheem Sterling’s pass and finishing from a tight angle.
City did not heed the warning though, because the net was rippling again in the 11th minute – and this time, the goal stood.
After Vincent Kompany had lost a 50-50 with Coutinho, the Brazilian fed Henderson, who picked out Joe Hart’s top left-hand corner with a superb strike.
City responded well and could have levelled two minutes later when Aguero capitalised on a mix-up in the Liverpool defence, but his hooked left-foot shot cannoned back off the post.
The chance lifted City and they deservedly equalised with a fine team goal after 25 minutes.
David Silva fed Aguero in the right channel, and the Argentina striker brilliantly slipped in Dzeko, who beat Simon Mignolet with a low right-foot shot.
Lallana had another goal disallowed on 54 minutes when Martin Skrtel was in an offside position when nodding down a free-kick to Lallana, who finished from close range.
Sky Sports pundit Gary Neville, who was on co-commentary duty, described the way City were playing as “embarrassing” as they repeatedly were cut open in midfield by a relentless Liverpool attacking unit.
Coutinho was the spearhead and it was he that conjured up the match-winning moment on 75 minutes.
It was an effort very similar to Henderson’s as Sterling fed Coutinho on the left corner of the box, and he then cut inside and swept a brilliant right-foot shot into the far corner.
City stepped up their intensity after the goal as Liverpool tired slightly and with the clock ticking down, Silva shot agonisingly wide from inside the area after Yaya Toure had bulldozed his way through the Liverpool midfield and defence.
But an equaliser would have been harsh on Liverpool, who restricted City to just one shot on target throughout the game – the fewest they have had in any Premier League game this season.
Liverpool march on, with Burnley next up at Anfield on Wednesday night, when Manuel Pellegrini’s City host Leicester at the Etihad.
Liverpool: Mignolet (7), Can (7), Skrtel (7), Lovren (6), Henderson (8), Allen (7), Moreno (6), Markovic (6), Lallana (7), Coutinho (8), Sterling (7).
Subs: Sturridge, Toure.
Man City: Hart (6), Zabaleta (6), Mangala (5), Kompany (6), Kolarov (6), Fernandinho (5), Yaya Toure (6), Silva (7), Nasri (6), Dzeko (6), Aguero (6)
Subs: Lampard, Bony, Milner.
Man of the Match: Philippe Coutinho.