Goals from Lorenzo Insigne, Andrea Belotti, Eder, Federico Bernardeschi and Manolo Gabbiadini sealed a comfortable win for the hosts in Udine, although they remain second in the standings courtesy of Spain's triumph away to Macedonia in Skopje.
The Azzurri never looked in danger of picking up anything other than three points, but for some time it looked as though the match could go down as a missed opportunity to make up ground on Spain's superior goal difference.
However, three goals in the final 20 minutes went some way to alleviating those worries as Italy remain level on points with Spain and now only four goals worse off.
It could have been even better for the hosts had they not had a goal ruled out inside three minutes, but Antonio Candreva's celebrations were cut short by the linesman's flag to deny them a perfect start.
The fact that Spain had thrashed Liechtenstein 8-0 may have been on Italy's minds, but it took them until 10 minutes before half time to finally break the deadlock against the minnows.
The goal was well worth the wait, though, as Insigne collected Leonardo Spinazzola's pass before swivelling inside the box and firing an unstoppable volley into the far top corner.
Italy almost made it two before the interval when Ciro Immobile latched on to a pass in the area, but Peter Jehle in the Liechtenstein goal was equal to the effort this time and the hosts were forced to go into the break with just a solitary goal to their names.
A second arrived within seven minutes of the restart, though, as Insigne turned provider with a defence-splitting pass through to Belotti, who had only the keeper to beat and made no mistake when stroking a confident finish into the corner.
Italy had the ball in the back of the net again with a little over 20 minutes remaining, but once again the linesman's flag denied them and it looked as though Liechtenstein may hold the European giants to a respectable 2-0 scoreline.
However, the Azzurri were quickly back on the attack and grabbed a third in the 74th minute when Eder played the ball out wide for Belotti before racing into the middle and latching on to the return cross, turning it past the keeper at full stretch.
With the three points in the bag, Italy could focus on increasing their goal difference in the closing stages, and a fourth arrived with seven minutes remaining when, after a patient spell of possession from the hosts, Bernardeschi drilled a 25-yard strike into the bottom corner.
Liechtenstein's brave resistance had fallen apart in the closing stages of the match, and Italy added one more to their final tally before the visitors were put out of their misery when Southampton striker Gabbiadini turned Spinazzola's cross past the keeper at the near post.
Spain and Italy now both sit on 16 points apiece at the top of Group G, seven clear of Albania in third.