The Reds, who were already out of contention for progressing to the Round of 32, were beaten by goals from Joe Taylor (two), Joe Low and Cameron Ashia.
The current League One leaders went ahead in the group-stage concluder with 41 seconds on the clock.
After Liverpool gave away possession in their own third, Bojan Radulovic lofted a pass into Taylor, who controlled and then made no mistake in front of goal.
Rob Page's side steadied themselves, going close with a James McConnell header from a corner, but fell 2-0 behind on the half-hour mark.
Taylor side-footed past goalkeeper Bailey Hall after being found by Ashia's pass in behind the back line.
The hosts added their third a few minutes before the break, Low heading in an Archie Collins corner.
In the final action of the half, a cleared Joe Bradshaw cross fell invitingly to Afolami Onanuga but he was unable to keep his effort down.
Having continually threatened to get on the scoresheet, Ashia finally did in the 61st minute.
The attacking midfielder's initial shot from the edge of the box struck the post and he was first to the rebound to complete the scoring.
The Reds threatened in the second half through Josh Sonni-Lambie's long-range effort and then a powerful Luke Chambers free-kick.
And a positive was the return of Clae Ewing from injury, with the full-back stepping off the bench to make his first appearance since March.
Team
Liverpool: Hall, Chambers, McConnell (Upton, 88), Bradshaw (Ayman, 88), Ndiaye, O'Connor (Ewing, 67), Sonni-Lambie, Pitt, Trueman (Cowley, 74), Laffey, Onanuga (P. Farkas, 67).
Unused subs: M. Wright, Adekoya.
Next up
The U21s return to action in Premier League 2 on Saturday November 28. They host Birmingham City at the Kirkby Academy in a 2pm GMT kick-off.
