The reigning European champions will travel to Anfield for the first time since 2009, when they lost 4-0 in the same competition.
Lambert believes that the Reds have no reason to be fazed against their Spanish opposition.
"This is Liverpool football club and this is where we are supposed to be," he told the club's official website. "We've been away from the competition for a few years, but this squad definitely feels at home on nights like this.
"Games don't come bigger than against Real Madrid. On any given day, we can beat anyone, especially at home. When the fans are in full voice, which I know they will be against Real Madrid in the Champions League, we're unstoppable at times.
"If [the fans] are in full voice on Wednesday, it doesn't matter who the opposition is, it will be very hard to take any points from us."
Liverpool lost 1-0 to Basel in their previous group match.