The two teams were separated by just one point in the Premier League last term and it took a shoot-out to split them in the season opener at Wembley as it was 1-1 after 90 minutes.
Goalkeeper Claudio Bravo made the decisive intervention, saving Liverpool’s second penalty from Georginio Wijnaldum, with Gabriel Jesus firing home the crucial spot-kick.
City had led for most of normal time after former Liverpool forward Raheem Sterling scored against his old club for the first time in the 12th minute.
Champions League winners Liverpool responded well and went close several times before substitute Joel Matip levelled 13 minutes from time.
Jurgen Klopp’s men almost snatched victory in the dying seconds but Kyle Walker made a dramatic goal-line clearance from Mohamed Salah, who did everything but score in a hard-working display.
The game was a fine contest between two well-matched sides, despite both having players undercooked due to limited pre-season preparations. Liverpool hurried Roberto Firmino and Salah back into their side despite them only returning to training this week and Sadio Mane was unavailable.
City handed a debut to record signing Rodri but record goalscorer Sergio Aguero was on the bench.
The game still started at a lively pace and City, sporting a retro kit to mark their 125th anniversary, had an early chance when Leroy Sane shot into the side netting. Firmino tested Bravo at the other end and Salah shot wide.
City suffered a blow when Sane appeared to jar his knee under a challenge from Joe Gomez. The German, whose future remains the subject of speculation amid reports linking him with Bayern Munich, limped off.
The champions were not hampered, however, taking the lead before Sane’s replacement Jesus had even taken the field. The ball was lofted into the area and David Silva pulled back for Sterling to volley home, although the England forward’s connection was not the cleanest.
Salah threatened an equaliser but dragged a shot onto a post and then blasted over after a poor clearance.
Sterling had another effort beaten away by Alisson Becker before City boss Pep Guardiola was shown the yellow card by referee Martin Atkinson for an angry reaction to a challenge on Silva by Gomez. Guardiola may also have tested Atkinson’s patience by encroaching onto the field to speak to Walker during the ensuing stoppage.
City went close again early in the second half when Silva fired over and Sterling curled a shot against a post, although a flag had already been raised.
Liverpool turned up the heat and hit the frame of the goal twice in quick succession.
First Virgil Van Dijk clipped the ball against the bar from a corner and the ball bounced onto the line and Salah then drove another effort against the post.
Sterling had another chance to double the lead but delayed too long and Alisson denied him.
The equaliser came 13 minutes from time as Van Dijk lobbed a Jordan Henderson free-kick back towards goal and Matip headed home.
Liverpool finished the stronger and Bravo then saved from Naby Keita and Salah, who also had an effort deflected over. Salah went close again in stoppage time but John Stones blocked and the Egyptian’s follow-up header was dramatically cleared off the line by Walker.
With no extra time, the game had to be settled on penalties and Ilkay Gundogan, Bernardo Silva, Phil Foden, Oleksandr Zinchenko and Jesus were all on target for City.
The 19-year-old Italy forward has signed a five-year deal with the Toffees, to become the club’s fifth summer signing.
The highly-rated hitman scored six goals in 13 appearances in helping Juventus claim last term’s Serie A title, having made his club debut as a 16-year-old. The Italian club said the fee was an initial €27.5million.
“I am very proud and honoured to wear the Everton shirt; I will give my best to this team,” said Kean.
“I was convinced to sign because Everton is a club looking to the future and so am I.
“I know about the size of the club. It has big ambition and I will work very hard to help us fulfil what we want to achieve.
“I am used to winning and I want to bring this winning attitude to the team. I hope I will be very good on the field and bring the fans joy.”
Kean became Italy’s youngest senior national team scorer since 1958 when netting against Finland on his full senior debut, aged just 19 years and 23 days.
He was subjected to racist abuse during Juventus’ 2-0 Serie A win at Cagliari in April, holding his arms aloft to the crowd after scoring in response to the crowd.
Everton have already recruited Andre Gomes, Fabian Delph, Jean-Philippe Gbamin and Jonas Lossl this summer.
Now the Toffees hope the livewire frontman will add a significant boost to their squad ahead of the new Premier League campaign.
“A striker was one of our priority signings this summer,” said Everton manager Marco Silva.
“Moise is strong, fast, with many good qualities as a striker and he is just 19 years old. He has talent and he is ready to work, ready to improve our squad and gives us different solutions.
“Of course he was at a big club, now he’s come to another big club and is ready to fight for this challenge and to give everything to Everton football Club.”
Pep Guardiola was unhappy with his team’s recognition by both FIFA and the player of year awards, claiming his players do not get the recognition they deserve for last season’s achievements.
Manchester City were the first side ever to win all three domestic trophies but when the shortlist for FIFA Best men’s player of the year was announced this week, no City players were included.
Premier League runners-up Liverpool had three names on the 10-man shortlist in Sadio Mane, Mohamed Salah and Virgil Van Dijk. Van Dijk was also last season’s PFA Player of the Year.
“It is the first time in history, four titles in one season, I would sign right now to do what we have done last season again,” said Guardiola ahead of the two sides’ Community Shield meeting at Wembley on Sunday.
“It doesn’t matter that people don’t consider us in UEFA awards and FIFA awards, not my players, I don’t think one player makes a better season that Bernardo Silva for instance – even winning with Portugal, you know what we have done.
“This club, in eight years, have won four Premier Leagues – this is quite remarkable. And never in these four seasons was one of our players nominated as one of the best in the league. Never.
“As in eight years to win the Premier League four times is quite good, and never one player not Sergio (Aguero), not David (Silva), not Vincent (Kompany), not Yaya (Toure) not the players in the past was even suggested to so…
“The year with 100 points, and a huge respect for Mohammed Salah, but Kevin de Bruyne to make 100 points was above and beyond that the normal situations so…but it is opinions so we accept that the players don’t deserve it.”