Madrid's preparations the game were disrupted by a positive Covid-19 test for central defender Raphael Varane before the game, but it didn't affect their performance on Tuesday night, Xinhua news reports.
The first half saw Zinedine Zidane's side take a 2-0 lead as they controlled the play and made a mockery of Liverpool's high pressing.
Vinicius Jr had arguably his best game for the club and gave the isolated Trent Alexander-Arnold a difficult night on the Liverpool right.
The Madrid winger opened the scoring after Toni Kroos' long pass made a mockery of Liverpool's pressure and he took full advantage of the space behind the defense in the 27th minute.
A pass from Kroos also led to Madrid's second goal nine minutes later as Alexander-Arnold headed his long pass across his own area directly to Marco Asensio who was able to lift the rebound into the net.
Liverpool coach Jurgen Klopp replaced Nabi Keita with Thiago Alcantara before the break as a clear sign of how unhappy he was. It looked to have had some effect when Mohamed Salah pulled a goal back for the visitors after prodding home from close range following a shot from Georginio Wijnaldum.
Liverpool's defense was breached again in the 65th minute when Vinicius's shot went through Phillips' legs and Alisson was unable to keep it out despite getting both hands on the ball.
Liverpool had most of the ball in the closing minutes but was unable to find a second goal.