The Reds slipped to a first defeat to a team from the third tier in 20 years, as giant Latics forward Matt Smith nodded his side on the way to a 3-2 win in the opening seconds.
Captain Luis Suarez equalised for the Reds, but just when Liverpool looked like they were taking control of the contest and easing to the win that many expected them to achieve, Smith profited from an error from goalkeeper Brad Jones to restore Oldham’s lead on the stroke of halftime.
Reece Wabara’s fantastic header made it 3-1 early in the second half, and although Steven Gerrard appeared from the bench to try to inspire Liverpool to yet another cup comeback, one never materialised.
A deflected volley from Joe Allen raised the Reds' hopes, but Gerrard’s thunderous strike from distance against the crossbar in the closing moments summed up Liverpool’s day as they slipped to a demoralising defeat.
Here are some lessons learned from Brendan Rodgers’ most depressing day in the Liverpool hot seat.
Before reflecting on anything that Liverpool did or did not do, tributes have to be paid to the excellent efforts of Oldham Athletic.
The heroics of the likes of Bradford City, Luton and Brentford have shown that lower-league and even non-league teams simply cannot be underestimated in English cup competitions, and Paul Dickov's men thoroughly deserved their victory on a Boundary Park afternoon that they will never forget.
Theirs is a yet another story for English football's "giant-killing" heritage.
This was not a happy afternoon for Sebastian Coates.
Amidst much talk of a possible move away from the club (Daily Mirror), the Uruguayan defender came into the team on an afternoon which wasn't for the fainthearted.
Missing the guile of Daniel Agger and the experience of Jamie Carragher―both of whom will probably come into the side for the Arsenal match on Wednesday―Coates and Martin Skrtel simply didn't look capable of dealing with the aerial bombardment that Oldham sent toward giant forward Smith.
Coates struggled more than his partner, and can't have impressed either his current manager or bosses thinking of taking him on a temporary basis.
Had goalkeeper Brad Jones not fumbled the ball in the closing stages of the first half, then it is possible to think that Liverpool would still be in the FA Cup.
Without the supreme confidence boost to take into the second half, it is feasible to think that Oldham could have wilted somewhat and eventually submitted to Liverpool's power, but Jones' juggling gave them a lead that they were determined to improve on and protect.
Provided that Pepe Reina recovers from injury in time to face Arsenal on Wednesday, it might be the last significant contribution that the Australian makes this season.
Brendan Rodgers was particularly critical of his "young players" after the loss (LiverpoolFC.com), and although he quite rightly refused to name any names, it is easy to focus on Liverpool's fledgling full-backs given that Jack Robinson struggled all afternoon and Andre Wisdom was substituted.
Both retain enormous promise and should hope that this setback doesn't haunt them for the months and years ahead in what should be successful careers, but handling the pressures and expectations that come with representing Liverpool at a hyped-up lower-league ground and against players playing in the game of their lives represents a big learning curve.
It is in the memory bank now, along with the pain of defeat.
Hammering Norwich at home in the Premier League is one thing, and teaming up in two huge games at two of the Premier League's amphitheatres in the coming week is quite another, but this was a different challenge altogether for Liverpool's forwards.
Luis Suarez, Daniel Sturridge, Fabio Borini and Raheem Sterling were all on the pitch together from the start for the first time here, but things didn't quite click the way that they would have wanted them to.
Everything is still a work in progress for Liverpool, but in a game where they were expected to dominate and put their lowly opponents in their place, they never really got going.
Improvement can only come through hard work.
When they sacked Kenny Dalglish in the summer, Fenway Sports Group seemed to admit that Liverpool's run to the finals of both domestic cup competitions under the Scot simply didn't matter.
The reaction to this loss must tell them that it certainly does matter to supporters, though, and as fans come to terms with elimination from a competition they hold a great fondness for, the owners would do well to take note.
This loss will hurt for the coming days, and will be remembered for the months and years to come.
The domestic cups matter to Liverpool, and now they're out of both.