The Italian international played the final 13 minutes of the fourth round clash but could not stop the Gunners from booking their place in the last eight after Emiliano Insua's first for the club was sandwiched by Fran Merida's stunning opener and Nicklas Bendtner's second-half winner.
 
Having seen off League One leaders Leeds United in round three, a trip to the Emirates to face Arsene Wenger's talented youngsters was always going to be a stiff test for a much-changed Liverpool line-up.
 
Out went the majority of the heroes from Sunday's 2-0 success over Manchester United as Rafael Benitez brought in nine new faces.
 
Goal-hero David Ngog was rewarded with a starting berth alongside Andriy Voronin in attack and he looked like a potential match-winner as Liverpool enjoyed the better of the early exchanges.
 
A slick move on three minutes almost provided Dirk Kuyt - named as skipper for day - with the opener, but he volleyed off target after the young Frenchman had crossed from the right.
 
The Reds looked intent on stamping their authority on the game and another passage of flowing football five minutes later saw Ngog back heel into Philipp Degen's path, but the full-back saw his outside of the foot shot arrow inches past the post.
 
The hosts had barely had a look in but should have been ahead on 16 minutes when the one-touch creativity that has become a hallmark of Arsenal's play saw Bendtner exchange passes with Eduardo before fluffing his lines six yards from goal.
 
The Emirates faithful were quick to show their frustration at the Dane for squandering such a good opportunity, but just three minute later they were on their feet in celebration of the opener.
 
Voronin lost possession deep in Liverpool territory, allowing the Gunners to work the ball to Merida, who turned on the edge of the area and crashed an unstoppable piledriver into the top corner via the upright.
 
It was a significant blow for Benitez's young charges, but they responded in the right manner and found themselves level seven minutes later, courtesy of an unlikely source.
 
A long ball forward by Martin Skrtel was nodded into the path of Insua by Babel. The left-back was quick to surge on to the header and, with the single-minded approach of a striker, unleashed a dipping volley that flew over Lukasz Fabianski and underneath the crossbar.
 
Half an hour played, a sublime strike apiece and we now had a cup tie that was beginning to warm up nicely.
 
Liverpool were enjoying the best of the possession but it was Arsenal who could and probably should have restored their lead just before the interval.
 
First Samir Nasri beat Cavalieri to a loose ball before seeing his clipped effort headed to safety. From the resulting corner the home side were presented with an even better opening, but Bendtner drilled straight at the Reds stopper after he was left in acres of space at the far post.
 
With just two minutes left of the half, the hosts came even closer, failing to turn home following an almighty goalmouth scramble. Eduardo, Mikael Silvestre and Bendtner all had the chance to stab home inside the six yard box, with the ball eventually falling into the grateful arms of Cavalieri.
 
After surviving a mini onslaught, the Reds needed to regain their composure in the second period, but as the game began to stretch from end to end, the Gunners manufactured an opening that finally saw Bendtner take an opportunity and put Arsenal ahead on 50 minutes.
 
Merida cut in from the left touchline and fed Aaron Ramsey, whose first touch instantly released Bendtner. The gangly forward held off the challenge of Skrtel before thumping a shot beyond Cavalieri into the roof of the net.
 
It was a goal that could so easily have knocked the stuffing out of the Reds, but once again they came back strong.
 
A magnificent four man move involving Voronin, Degen, Kuyt and Spearing ended with the Ukraine international holding off a challenge before firing just shy of the far post.
 
Babel then tested Fabianski with a thunderous free-kick as the visitors pressed.
 
The introduction of Yossi Benayoun and Aquilani - a much anticipated debut - bolstered the Reds' hopes of forcing extra-time and they should have snatched a second equaliser on 80 minutes.
 
Kuyt found space on the right hand side of the area and crossed low into the six yard box for Babel, who somehow failed to connect with the goal at his mercy.
 
Aquilani then had his first effort in a red shirt easily held by Fabianski and Voronin forced a smart save from the Gunners' stopper.
 
Benitez gave it one last throw of the dice by introducing Nathan Eccleston for his full debut, but it was Aquilani who almost saved the day when his acrobatic effort appeared to hit an Arsenal arm in the area - but the referee waved away Liverpool's appeals and with it their hopes of progressing to the last eight.