Sam Allardyce's determined team were outdone after stunning strikes from Steven Gerrard and Peter Crouch put Liverpool into the driving seat.
Dirk Kuyt completed the rout to send Liverpool into third place in the table.
Bolton's wonderful Christmas run was finally ended after their small squad's ageing legs finally gave way in a high-tempo match.
Liverpool started off brightly and had their first shot on the two minute mark after good work between Gerrard and Kuyt.
The Liverpool captain played a one-two with the Dutchman but his low drive flashed past Jussi Jaaskelainen's right-hand post.
Two minutes later the Reds came close again. A long ball up the park was met by the head of Crouch and his knock down found strike partner Kuyt, whose shot was blocked by Ivan Campo.
The FA Cup holders controlled long periods of the first half but resolute Bolton did pose a threat with the lively Nicolas Anelka always waiting to pounce.
The Frenchman almost got a chance in 15th minute, but after good work down the right Nicky Hunt's cross was blocked by the ever-present Jamie Carragher.
The best effort of the first half came from the unlikeliest of sources. Liverpool right-back Steve Finnan linked up well with Jermaine Pennant and the consistent Finnan hit a rasping 20-yard drive only to see the Bolton keeper palm his shot on to the bar.
The Reds carried on firing everything at Bolton's goal and almost scored again after a bit of majestic football.
John Arne Riise burst down the left-hand side leaving Hunt for dead and whipped in a dangerous cross. Pennant picked up the ball and his lay off found Xabi Alonso, but the Spaniard's drive flashed agonisingly wide.
Bolton were solid in defence though and despite Liverpool's best attempts to break them down the in-form side held firm to go in at the break level.
The second half started similar to the first with Liverpool pressing and Bolton defending well.
But Liverpool turned on the magic in a majestic two-minute spell and it was Crouch who finally broke the deadlock in the 61st minute.
Kuyt picked the ball up 40 yards from goal and the Dutchmen played a delightful pass to Pennant. The winger then whipped in a beautiful chipped cross which Crouch met with an overhead volley from nine yards out to leave the Bolton keeper with no chance.
The fans had barely sat down when Liverpool went 2-0 up and it was Gerrard who provided the finishing touch.
Kuyt and Pennant linked up again down the right and this time it was Kuyt who put in a chipped pass towards the six-yard box. The skipper sneaked in between Bolton's centre-backs to volley the ball into the roof of the net to send Anfield into raptures.
Bolton brought on Portugal youngster Ricardo Vaz Te in a bid to cut the deficit but in truth the match was all but over after the second goal.
Kuyt completed the rout with a neat finish after a nice ball played him clean through in the 83rd minute.