A much-changed Liverpool side needed penalties to overcome League One Derby County after a goalless 90 minutes ended with the holders securing their place in the fourth round.
Jurgen Klopp made 11 alterations from the weekend's victory at Tottenham, and Derby held their own despite the 43-place disparity in league position.
The Rams' resistance made it all the way to the final whistle, but Caoimhin Kelleher saved three Derby penalties to see the Reds through.
Liverpool's escape keeps one of their best chances of silverware this season alive, with the Reds already 15 points behind Premier League leaders Arsenal.
Klopp's men dominated the early possession and Alex Oxlade-Chamberlain nearly gave them the lead after 15 minutes, but his powerful volley flew just wide after a corner was headed out to him.
The Reds continued to have the majority of the ball but they struggled to create clear-cut chances, as Derby sat back and made it difficult for the hosts.
The Rams' hard work was nearly undone before the break though, Layton Stewart latching onto centre-back Eiran Cashin's heavy touch before playing a one-two with Fabio Carvalho, though the young striker could only sidefoot well over.
Derby missed a great opportunity just after the break, Max Bird lashing wide after the ball fell kindly to him in the box before Joe Wildsmith was called into action, denying Oxlade-Chamberlain's deflected drive and then pushing away Carvalho's effort.
Klopp rang the changes to try force a way through, but the substitutions could not prevent the game going to penalties, despite Harvey Elliott and Roberto Firmino testing Wildsmith.
Wildsmith's opposing number Kelleher came up huge in the shootout to produce a trio of saves before Elliott stroked home to save Liverpool's blushes.
What does it mean? Klopp's changes nearly come back to bite him
It is understandable that Liverpool's performance lacked rhythm, considering the wholesale changes and the youth they had on the pitch.
While the Reds dominated the game with 74 per cent possession and 19 attempts to Derby's six, Klopp will be breathing a huge sigh of relief after this one.
Kelleher to the rescue
Liverpool were helped out by a superb performance in the penalty shootout by their young Ireland international.
Coming in for a goalkeeper of Alisson's ability will never be easy, but Kelleher showed his manager that he is fully capable of stepping up with three excellent stops.
With the spot-kicks level at 2-2, substitute Firmino had the opportunity to put Liverpool ahead after three penalties each.
However, he blazed his effort well over the crossbar before he was bailed out, firstly by his goalkeeper saving from Everton loanee Lewis Dobbin, and then Elliott's cool finish into the bottom-right corner to secure victory.
Both teams return to domestic action on Saturday, with Liverpool hosting Southampton in their final Premier League match before the World Cup while Derby will travel to MK Dons.