Doha, Qatar: Mohamed Salah did not score, Liverpool could not dominate as the fans thought they would, but the Reds still had plenty of aces up their sleeves.
Jurgen Klopp brought one of them, Roberto Firmino, as a late substitute and the Brazilian did just enough to score the winner in the first minute of added time to break the Monterrey resistance and their hearts.
European champions Liverpool will take on Flamengo in the final on Saturday, looking to add a first FIFA Club World Cup to their trophy cabinet.
Nabi Keita had given Liverpool the lead in the 12th minute only for Monterrey to equalise through Rogelio Funes Mori in the 14th during an opening period dominated by Premier League leaders.
After passing the ball around with clockwork precision for the first 10 minutes, Liverpool made their first real move and it ended up in the Monterrey net.
James Milner found Salah, who was closely marked, but the Egyptian star, the most sought after player in the Arab world, showed he can also create goals with a delightful reverse pass for Nabi Keita.
The Guinean midfielder, in fine goalscoring form of late, timed his run to perfection and finished it with aplomb.
If anyone thought the goal would give Liverpool a firm grip on the match, it only galvanised the men in blue and white stripes.
And just two minutes later they equalised.
Stefan Medina rose the highest to head a long diagonal ball into the danger area and after a couple of headers, it fell into the path of Jesus Gallardo who met it with a first-time volley. Though Alisson blocked the shot, Mori was at the right place at the right time and the Argentinian striker took his time and calmly slotted the ball home.
With Liverpool possessing top class talents such as Salah, Origi and Keita and Monterrey looking to attack, the start gave the impression that it would be a goal-fest.
For the next goal though, the crowd had to wait until the first minute of added time, and it came from the boot of Firmino, another favourite with fans here.
Salah tried to wriggle his way into the box but had to go back to Trent Alexander-Arnold whose pass into the six-yard box was expertly met by Firmino as the crowd let a roar.
Though Salah could not score in front of a predominantly Arab crowd, he still made his mark and won the man of the match award with plenty of trickery including a few surging runs and defence-splitting passes.
The first pass had given Liverpool their opening goal and they nearly got another as the curly-haired magician served another one, a back heel, for James Milner who however could not beat Marcelo Barovero in Monterrey goal.
The Mexican goalkeeper made another telling save as he snatched the ball right from the feet of Keita after an Alex Oxlade Chamberlain reverse pass had let the Guinean clear on goal in the 43rd minute.
Keita had another opportunity at the start of the second half after he made good use of his strength and determination to make space for himself in Monterrey penalty area only to shoot straight at Barovero.
But the Mexicans were taking the game to Liverpool at the slightest of opportunities and even coach Antonio Mohamed was not holding back, involving in a heated argument with Klopp, with both of them getting into referee Roberto Tobar's book for their troubles.
Mohamed had said that his team were dreaming about winning the title and they showed they were dead serious about it as captain Dorlan Pabon led by example.
The rightwinger was a constant threat for Alisson, and on another day, could have easily had a couple of goals to his name.
Pabon first drew a save from Alisson in the 27th minute with a shot from distance while in the 37th Liverpool's Brazilian goalkeeper got a fingertip to his cross, and the slight deflection taking the ball away from its intended target, Mori who was inches away from scoring his second.
Pabon tested Alisson again while Leonel Vangioni did the same with a stinging shot as Monterrey played a confident attacking game throughout.
Klopp was not happy about playing another 30 minutes and sent in his best players.
And when Sadio Mane, who came in as a late substitute, sent his shot straight at Barovero, the game looked like moving into extra-time, But Firmino and Liverpool had other ideas.
The goal thrilled the Liverpool supporters, plenty of whom were wearing the famous red shirt and holding a 'You'll Never Walk Alone' scarf, but a couple of hundred Monterrey fans fell silent for a moment, after singing their hearts out right from the first whistle.
After the initial shock, they found their voices again, for their team, a bunch of warriors as they proved, had won their hearts at least.