Liverpool suffered a severe blow to their hopes of securing Champions League football as they were frustrated by Mick McCarthy's side in a Barclays Premier League clash at Molineux.
The Reds actually moved above Manchester City on goal difference into fifth spot with a share of the spoils but have played two games more.
In contrast, it was a precious point for Wolves in their battle to stay in the top flight.
Liverpool boss Rafael Benitez, whose agent has played down reports linking the Spaniard with a move to Juventus, saw his side dominate the opening 45 minutes in terms of possession.
But, in the absence of the injured Fernando Torres, they lacked a decisive cutting edge despite the return after a hamstring injury of skipper Steven Gerrard who was well policed by Michael Mancienne.
McCarthy opted for a change of formation with record signing Kevin Doyle the only striker in a 4-5-1 formation and they frustrated the Reds throughout the first 45 minutes with veteran defender Jody Craddock outstanding.
But after the break Wolves played with increasing belief and fluency and it was their turn to enjoy large spells of territorial dominance.
Doyle was a constant menace with his pace and power unsettling the Reds rearguard despite often being outnumbered.
Liverpool, who had taken 10 points from the previous four games, were quickly into their stride.
Gerrard's second minute corner was met by the head of Albert Riera at the near post but his effort flashed across the Wolves box.
Dirk Kuyt, bubbling with confidence after his double against Tottenham, tried his luck from 20 yards out but Craddock was able to make an important block.
Reds goalkeeper Jose Reina was booed every time he touched the ball by Wolves fans who remembered his part in the incident when Stephen Ward was sent off at Anfield on Boxing Day.
Liverpool enjoyed the lion's share of possession but Wolves coped comfortably and the best chance of the opening half fell to Doyle after 33 minutes in a Wolves counter-attack.
Jamie Carragher was isolated in the right-back role and unable to prevent Matt Jarvis from getting past him and sending in a low cross to the near post.
Doyle made a run across the Reds defence to attack the ball at the near post but poked his shot just wide.
Jarvis was posing the biggest threat for Wolves and another teasing centre picked out the run of Kevin Foley at the far post but his header was directed straight at Reina.
Christophe Berra got in a great challenge to halt the run of Maxi Rodriguez into the Wolves box at the expense of a corner just before half-time.
Gerrard was a peripheral figure for most of the first half but threatened after the restart when he seized onto a ball in behind from Lucas Leiva only for Berra to be alert to the situation.
Marcus Hahnemann had to be alert when backpedalling to palm away a looping first time effort from the edge of the area by Riera.
Ward then almost played the home team into trouble with a mis-timed back pass but Hahnemann raced 20 yards out of his box to clear from Kuyt.
Doyle was impressing whenever Wolves ventured forward but would have been disappointed not to hit the target after he found some space outside the box.
Wolves were playing with increasing fluency and the belief was starting to grow amongst their young players.
Kuyt curled a 20-yard shot past the post after Gerrard enjoyed some rare freedom and the game was more of an entertaining spectacle.
Benitez made his first substitution after 67 minutes with David Ngog replacing Riera and Kuyt moving into a wider role.
The impressive Doyle drilled a left-foot shot past the post after getting past Martin Skrtel.
Skrtel was booked after 73 minutes for a lunge at Ward.
McCarthy replaced Nenad Milijas with David Jones a minute later.
The Reds actually moved above Manchester City on goal difference into fifth spot with a share of the spoils but have played two games more.
In contrast, it was a precious point for Wolves in their battle to stay in the top flight.
Liverpool boss Rafael Benitez, whose agent has played down reports linking the Spaniard with a move to Juventus, saw his side dominate the opening 45 minutes in terms of possession.
But, in the absence of the injured Fernando Torres, they lacked a decisive cutting edge despite the return after a hamstring injury of skipper Steven Gerrard who was well policed by Michael Mancienne.
McCarthy opted for a change of formation with record signing Kevin Doyle the only striker in a 4-5-1 formation and they frustrated the Reds throughout the first 45 minutes with veteran defender Jody Craddock outstanding.
But after the break Wolves played with increasing belief and fluency and it was their turn to enjoy large spells of territorial dominance.
Doyle was a constant menace with his pace and power unsettling the Reds rearguard despite often being outnumbered.
Liverpool, who had taken 10 points from the previous four games, were quickly into their stride.
Gerrard's second minute corner was met by the head of Albert Riera at the near post but his effort flashed across the Wolves box.
Dirk Kuyt, bubbling with confidence after his double against Tottenham, tried his luck from 20 yards out but Craddock was able to make an important block.
Reds goalkeeper Jose Reina was booed every time he touched the ball by Wolves fans who remembered his part in the incident when Stephen Ward was sent off at Anfield on Boxing Day.
Liverpool enjoyed the lion's share of possession but Wolves coped comfortably and the best chance of the opening half fell to Doyle after 33 minutes in a Wolves counter-attack.
Jamie Carragher was isolated in the right-back role and unable to prevent Matt Jarvis from getting past him and sending in a low cross to the near post.
Doyle made a run across the Reds defence to attack the ball at the near post but poked his shot just wide.
Jarvis was posing the biggest threat for Wolves and another teasing centre picked out the run of Kevin Foley at the far post but his header was directed straight at Reina.
Christophe Berra got in a great challenge to halt the run of Maxi Rodriguez into the Wolves box at the expense of a corner just before half-time.
Gerrard was a peripheral figure for most of the first half but threatened after the restart when he seized onto a ball in behind from Lucas Leiva only for Berra to be alert to the situation.
Marcus Hahnemann had to be alert when backpedalling to palm away a looping first time effort from the edge of the area by Riera.
Ward then almost played the home team into trouble with a mis-timed back pass but Hahnemann raced 20 yards out of his box to clear from Kuyt.
Doyle was impressing whenever Wolves ventured forward but would have been disappointed not to hit the target after he found some space outside the box.
Wolves were playing with increasing fluency and the belief was starting to grow amongst their young players.
Kuyt curled a 20-yard shot past the post after Gerrard enjoyed some rare freedom and the game was more of an entertaining spectacle.
Benitez made his first substitution after 67 minutes with David Ngog replacing Riera and Kuyt moving into a wider role.
The impressive Doyle drilled a left-foot shot past the post after getting past Martin Skrtel.
Skrtel was booked after 73 minutes for a lunge at Ward.
McCarthy replaced Nenad Milijas with David Jones a minute later.
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