With a victory regarded as vital to Roberto Mancini's side, they seemed on course when they took the lead through Edin Dzeko. However, the visiting Merseysiders were level before the break courtesy of former City striker Daniel Sturridge.
Below, Sports Mole has looked back over the action to see if either side deserved to win.
On target 5
On target 12
Was the result fair?
There is only one team that could put forward a valid argument that they deserved to win this match and that is Liverpool. They were the better side from the first whistle and probably have not performed that well for 90 minutes all season. Brendan Rodgers will be pleased with his team, but it may be tinged with disappointment at the fact that they didn't win the game.
Man City's performance
Mancini's side were below par, there can be no denying that. For large parts of the first half and at times after the restart there seemed to be no tempo to their play. Having said that, they showed great character to battle back for a draw having been dominated for the majority of the encounter. It's that fighting spirit which means that the title race is not over, despite the fact that the gap has been widened to nine points this weekend.
As mentioned above, the only thing missing for Liverpool today was the three points. The Reds were extremely good on the ball, but it was when they were without it that they were most impressive. They hunted in packs and forced City into making errors, thus regaining possession quickly. The striking partnership of Sturridge and Luis Suarez is also blossoming nicely.
Sports Mole's man of the match
Daniel Sturridge: This was not only Sturridge's best performance in a Liverpool shirt, it was probably one of the best of his career to date. He was always a threat to the City defence and linked up well with his teammates. The England international also scored a very good goal, which his display deserved.
But for an error from Pepe Reina, Liverpool would be leaving the Etihad Stadium with all three points. For some unknown reason, the keeper decided to rush out of his goal to meet Aguero to the right of the penalty area. The City striker simply side stepped the Spaniard, before lifting the ball into an empty net.
This was one of the best matches so far this season and referee Anthony Taylor played a major part in making that happen. He wasn't one to flash the yellow card too early and made a point of explaining his decisions to the offenders. He also was right to book Sturridge for diving inside the area when others may have given a penalty.
Man City: The champions are on the road next Saturday evening when they travel to struggling Southampton.
Liverpool: Meanwhile, Liverpool will play host to West Bromwich Albion on Monday night.