Champions City, out of the League and FA Cups, are five points adrift of leaders Chelsea, but could cut the deficit to two with the West London club playing Tottenham Hotspur in the League Cup final on Sunday.
Despite boasting an expensively assembled squad, City went four league games without victory in the absence of midfield powerhouse Yaya Toure on African Nations Cup duty.
But back-to-back wins against Stoke City and Newcastle United, with an aggregate scoreline of 9-1, have reignited their faltering title challenge.
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Resurgent Liverpool, unbeaten in 10 league games, are the Premier League's form side and will pose a stubborn challenge in front of a fervent Anfield crowd.
The Reds last tasted defeat on Dec. 14 -- a 3-0 loss to Manchester United which sent them into the bottom half of the table -- but they have not lost since to mount a top-four challenge.
Liverpool beat high-flying Southampton 2-0 in their last game, a week after defeating Spurs 3-2, to climb to within three points of third-placed Arsenal.
"Yes (the race for European qualification) is very exciting and all the teams up there are fighting," manager Brendan Rodgers told the BBC.
"Our only regret is we didn't make a good start (to the season). It's how we finish which is important and this team is getting better all the time.
"We're three points off third place which is great and we've just got to keep this going."
Perennial European qualifiers Arsenal, who slumped to a 3-1 home defeat by AS Monaco in the first leg of their Champions League last-16 tie, host 12th-placed Everton looking to consolidate third spot.
Fourth-placed Manchester United bid to bounce back from a toothless defeat by Swansea City when they host Sunderland and Southampton, in fifth, visit West Bromwich Albion.
Tim Sherwood's Aston Villa travel to Newcastle United in search of a first league victory in 12 games and West Ham United host Crystal Palace.
Relegation-threatened Burnley welcome Swansea to Turf Moor and Hull City visit Stoke.
(Editing by Ed Osmond)
