Liverpool grabbed a winner in the second minute of injury-time to stay on course for Champions League qualification.
Sami Hyypia's last-ditch header ended Wolves' brave fight for a point which they surely deserved in a gripping match.
Liverpool hurled themselves on to the massed old-gold ranks for much of the second half - but when all seemed lost the Finnish defender arrived on cue to save the day.
Paul Ince - probably playing his last game on the ground where he used to captain Liverpool - and Alex Rae gave Wolves every chance of a precious point.
In the end their hearts were broken, but never their spirit with Ince leaving the pitch drained of energy but able to turn and applaud an appreciative Kop.
Liverpool for so long had lacked the killer pass to penetrate Wolves' massed ranks. In the end they were undone by Steven Gerrard's corner, which dropped perfectly for Hyypia to head home.
Manager Gerard Houllier fielded the side that beat Portsmouth 3-0 in midweek for yet another must-win Premiership game for his unpredictable side.
Wolves, who produced a memorable fightback to claim a 1-1 draw at home to Liverpool back in January.
Wolves, with three ex-Liverpool men in their ranks - Paul Jones, Mark Kennedy and Ince - hurled themselves into the battle, with ferocious tackling and strong
running that unsettled Liverpool.
And it was not all about defence. They got at Liverpool's back four from the off. Henri Camara could not quite connect with a diving header in the six-yard
box and then Rae found space on the edge of the box for a drive held low down by Jerzy Dudek.
Liverpool got men down the left continually, mainly via Gerrard, and but for Jones' good handling, the hosts would have been ahead early on with Michael Owen constantly lurking.
But there was a tenacity about Wolves that showed they were not going to be easy to beat and this was typified by Camara's last- ditch tackle in his own box
to scoop the ball off Danny Murphy's toes 10 yards out.
Rae's full-blooded tackle on Harry Kewell also showed there was plenty of fight in Wolves.
Wolves were almost opened up when Gerrard's chip over the defence sent Kewell away, but as he closed in on the dropping ball, Jones hurtled from his line to
punch away on the edge of the box.
It was Jerzy Dudek's turn to come flying from his line next to hurl himself at Vio Ganea on the edge of the box to block a shot and end a dangerous situation
for Liverpool.
Then after 25 minutes came the talking point of the first half. Emile Heskey charged down a Jody Craddock clearance and surged away into the box, only to be
felled from behind by the recovering defender.
Referee Rob Styles instantly waved away penalty claims. Both managers and all the coaching staffs were on their feet on the line while Heskey received lengthy
treatment, surrounded by protesting colleagues.
Wolves were right in Liverpool's faces, forcing footwork errors from Dudek at one end and Kewell into hurried mistakes at the other.
Ince and Rae in midfield did a magnificent job securing decent possession, but when Murphy did get hold of the ball he slipped it into Owen's path and the
striker saw an angled drive shave the far post.
Camara was a constant problem with his pace, and he left Hyypia flat-footed with one run and forced John Arne Riise into a flying header in his own box to
stop the ball reaching the striker.
Then Kenny Miller lashed a 20-yarder just wide of the far upright with Dudek
clutching at thin air.
The pattern of the game continued in the same vein after the break. And when
Camara picked up a sloppy clearance on 47 minutes, he cracked in a low drive
which Dudek tipped round a post.
Heskey wasted a good opening after a ball was played into his stride by
Murphy, but Liverpool were creating precious few openings to test Jones.
There was little or no service into Owen, and the midfield were getting no
peace from Rae and Ince.
And when Dietmar Hamann drilled a 25-yard free-kick well wide, it just about
summed up the afternoon so far for Liverpool.
On the hour, Gerard Houllier opted for a double substitution. He took off
Heskey and Kewell and thrust Milan Baros and El-Hadji Diouf into the action.
Baros' first touch produced a fierce low cross from the right and Owen met it
with a hook shot that flashed just wide of the near post.
Wolves were defending in depth now but they still broke through Camara again
and his low cross to the near post was hacked off Ganea's toes by Riise.
Wolves then took off Ganea and put on an extra midfielder in Shaun Newton
seconds before Riise's 35-yard, dipping drive just cleared the bar.
Liverpool looked short of any real idea of how to break down Wolves' massed
ranks. Riise, with two long-range efforts, and Owen with a hook just over were
as near as they got.
But in the second minute of added time, Liverpool finally broke through.
Gerrard's corner from the left swung to the far post for Hyypia to send a
header crashing into the top corner.
There was still more drama. Wolves had to go for it from the restart and their
surge ended with Riise flat out on the edge of his own box. After several
minutes of treatment he was carried off, just as Wolves took a last-ditch
corner, but 10-man Liverpool survived.
Teams
Liverpool: Dudek, Carragher, Biscan, Hyypia, Riise,
Murphy (Sinama Pongolle 84), Hamann, Gerrard,
Kewell (Diouf 61), Heskey (Baros 60), Owen.
Subs Not Used: Henchoz, Luzi Bernardi.
Goals: Hyypia 90.
Wolverhampton: Jones, Naylor, Craddock, Butler, Clyde, Camara,
Ince, Rae, Kennedy (Cort 81), Miller, Ganea (Newton 71).
Subs Not Used: Oakes, Cameron, Irwin.
Booked: Newton.
Att: 43,795
Ref: R Styles (Hampshire).