It proved a horror show for Liverpool on Halloween as the Swans claimed a historic victory at Anfield to dump the holders out of the Capital One Cup.
The Swans created history as they reached the quarter-finals of the competition for the first time, with goals from Chico Flores, Nathan Dyer and Jonathan de Guzman writing a new chapter in the club's history's books.
With Brendan Rodgers and Joe Allen facing their former employers for the first time, the Reds were given a major scare when Chico headed home de Guzman's corner to score his first goal for the club and put the Swans ahead at the break.
Dyer tapped home to double the lead thanks to a fine pass from Pablo Hernandez, but when sub Luis Suarez pulled one back shortly after it made for a tense finish.
But the Swans held on, and went one better as Michu squared for de Guzman to end the contest with his first ever Swans goal.
It was a thoroughly deserved win for Michael Laudrup and co, with the Swans now looking forward to a home quarter-final tie with Championship side Middlesbrough.
Swans boss Michael Laudrup named a strong line-up at Anfield.
He made two enforced changes to the starting XI that lost 1-0 at Manchester City, with Gerhard Tremmel replacing the injured Michel Vorm in goal while Jazz Richards came in for the suspended Angel Rangel.
Dwight Tiendalli made his second start in a Swans shirt as he featured at left-back, while the rest remained unchanged.
Brendan Rodgers included former Swan Joe Allen in his starting XI as the pair faced the Swans for the first time since their switch to Anfield.
Rodgers named a strong bench with Steven Gerrard, Raheem Sterling and Luis Suarez all among the replacements.
Liverpool: Brad Jones, Jack Robinson, Sebastian Coates, Jamie Carragher (capt), Jordan Henderson, Jonjo Shelvey, Joe Allen, Joe Cole (Steven Gerrard, ht), Oussama Assaidi (Raheem Sterling, 65), Samed Yesil (Luis Suarez, ht), Stuart Downing.
Subs: Danny Ward, Suso, Martin Skrtel, Andre Wisdom.
Swans: Gerhard Tremmel, Jazz Richards, Chico Flores (Garry Monk, 58), Ashley Williams (capt), Dwight Tiendalli, Leon Britton, Jonathan de Guzman, Ki Sung-Yueng, Nathan Dyer, Pablo Hernandez (Wayne Routledge, 76), Michu.
Subs: David Cornell, Ben Davies, Kemy Agustien, Itay Shechter, Danny Graham.
Both sides settled into the game without any real threat in the opening stages.
Pablo Hernandez saw his chipped effort float over the crossbar before Nathan Dyer latched onto Ashley Williams' superb crossfield ball but his first touch was too heavy and keeper Brad Jones collected.
Ki Sung-Yueng then shot wide as the game past the 20-minute mark, with the Swans looking settled in the game.
Pablo Hernandez then linked up with Michu, with the winger latching onto the one-two, but when he cut inside to shoot, his effort was blocked ten yards out.
Gerhard Tremmel was first called into action in the 29th minute, parrying Stewart Downing's low drive wide for a corner.
Then the Swans carved open the best chance of the game so far on the half hour, Michu robbing Joe Allen of possession and setting Nathan Dyer down the left flank. He found Jonathan de Guzman on the right, and he raced into the box before chipping Jones. His effort, though, landed just over the crossbar.
Ki then saw his 25-yard shot palmed away for a corner, and from the resulting delivery, the Swans took the lead.
From de Guzman's delivery, Chico Flores lost his marker Sebastian Coates and headed into the corner of the net in the 34th minute.
Hernandez and Michu linked up again, with the former firing wide as the Swans continued to create chances.
Half-time: Liverpool 0 Swans 1
Brendan Rodgers made two changes at the break, bringing Steven Gerrard and Luis Suarez on for Joe Cole and Samed Yesil.
It was Jonjo Shelvey, however, who went closest first as Joe Allen latched onto Jazz Richards' mis-pass and fed the Charlton midfielder, but he fired over the crossbar from 12 yards.
Shelvey then provided a cross for Suarez, but the striker couldn't keep his header down as Liverpool continued their bright start to the half.
The Swans were then forced into a change as Garry Monk replaced Chico, who appeared to have sustained a thigh injury.
And they had a massive scare as Gerrard's deflected shot was palmed onto the post by Tremmel, with Stewart Downing scuffing the rebound wide.
The Swans replied with Hernandez, Michu and Nathan Dyer seeing their efforts blocked by the defence and Jones, with the visitors eventually getting a corner for their efforts.
Rodgers had also played his last roll of the dice with Raheem Sterling coming on for Oussama Assaidi.
Michu then went close to doubling the lead as he latched onto Hernandez's pass in the box but Jones diverted it for a corner.
From the delivery, Ashley Williams climbed highest but the Wales skipper saw his header fall agonisingly wide.
But the Swans did double their lead in the 72nd minute.
From deep inside their own half, the ball reached Michu after touches from Richards, Britton and de Guzman. Michu touched on for Hernandez and, with the Liverpool defence pushing forward, the Spaniard in on goal.
And instead of going for goal, the winger squared to the unmarked Dyer, who tapped home from four yards.
It proved Hernandez's last influence with Michael Laudrup replacing him with Wayne Routledge.
And within a minute of the winger coming on, Liverpool pulled one back.
Gerrard's inswinging free-kick found the unmarked Suarez, who headed home past the helpless Tremmel.
The Swans hit back, Ki racing on and touching left to Michu, who got into the box before Jones' diving save denied him.
Tremmel then stopped Suarez low down after the striker had won himself some space in the box as Liverpool started to pile forward for an equaliser.
The Swans were having to deal with a lot of pressure, but in a swift counter they raced upfield and ended the contest.
Michu was sent racing down the left flank and when he unselfishly squared for de Guzman, the midfielder touched in from two yards.
The Jack Army exploded into song, and they celebrated in style.