After the game had finished 2-2 following extra-time, the Reds prevailed 3-2 on penalties with Anthony Gerrard missing the decisive kick for the Welsh side.
It meant Kenny Dalglish has led Liverpool to a trophy in his first full season back at the helm, and he'll be hoping it proves the catalyst for further success in the remainder of 2011-12.
Joe Mason had given the Bluebirds a 19th minute lead against the run of play when he crept into space inside the box and struck through the legs of Pepe Reina.
Liverpool controlled the contest, but had to wait until the hour mark to equalise when Martin Skrtel pounced on a loose ball in the box to fire home after Luis Suarez's header had hit the post.
With no further goals in the 90 minutes, the teams contested half an hour of extra-time - and Dirk Kuyt fired the Reds into the lead when he found the net at the second attempt from the edge of the box on 108 minutes.
However, Ben Turner netted from a goal-mouth scramble following a Cardiff corner at the death to force penalties.
But it was to be Dalglish and co celebrating at the national stadium as his team lifted their first trophy since 2006.
Liverpool embarked on their journey to the cup final way back in August against Exeter City. Dalglish opted to name a strong starting XI that evening and it was a policy he kept faith with throughout the tournament as his side also overcame Brighton, Stoke, Chelsea and Manchester City en-route to a first ever visit to the new Wembley.
The final naturally proved no exception with the boss making just one change to the side that had prevailed 6-1 against Brighton in the FA Cup fifth round last weekend.
The fit-again Daniel Agger returned to the line-up to replace Jamie Carragher after overcoming a knock, while Craig Bellamy was named on the bench against his hometown club having returned to fitness.
That meant the attacking triumvirate of Steven Gerrard, Andy Carroll and Suarez spearheaded the Reds' attack in the capital in only their second start as a trio.
Liverpool went into their first domestic final since 2006 as heavy favourites against Championship side Cardiff as Dalglish led the team out in a major cup showpiece for the fourth time.
His players almost made a dream start to the afternoon inside two minutes when Glen Johnson saw an effort cannon off the underside of the crossbar following a speedy counter-attack. Gerrard could only whack the rebound over under pressure after being set up by Suarez.
The move was in keeping with a positive start from the Reds - but Cardiff threatened on 11 minutes when a well-worked passage of play carved open a shooting chance for Kenny Miller, but he fired high over the bar.
Back came Liverpool and Carroll's downward header from a Suarez centre had Tom Heaton scrambling across his goal-line to keep it out.
But on 19 minutes, Cardiff left the travelling Kop stunned by taking the lead.
Mason drifted into space behind Jose Enrique and found the back of the net with a low finish through the legs of Reina from Miller's pass.
The Reds were shaken but they set about looking to restore instant parity, and after Enrique had clipped a right-foot strike over from the edge of the box, Charlie Adam's low volley flew centimetres the wrong side of the upright.
Next, an intricate one-two between Suarez and Carroll inside the box almost presented the latter with a clear shooting opportunity, but Mark Hudson was able to produce a saving challenge for Cardiff.
Then, brilliant wing play from Stewart Downing allowed the winger to send in a dangerous centre which was completely missed by Jordan Henderson, before bouncing for Gerrard who struck off target.
With half-time approaching, Suarez worked space for a shot on the edge of the box, though his prod was claimed by Heaton, before the 'keeper thwarted an Agger header from a free-kick, but a flag was raised for offside.
Liverpool threatened again when Andrew Taylor flung his body in the way of a seemingly goal-bound Gerrard shot from just inside the area to ensure the Championship team went into the break holding their lead.
The Reds produced a commanding start to the second period, and only a fingertip save from Heaton prevented Suarez from levelling when the No.7 struck from a tight angle.
Then the Uruguay striker was denied a shot on goal by a fine challenge from Kevin McNaughton before Agger glanced a header wide from a corner.
With just over half an hour left on the clock, Dalglish decided to introduce Bellamy into the action to take the place of Henderson - and the Reds were level within a minute.
Carroll's header from Downing's corner was nodded on by Suarez. The ball struck the post, but broke for Skrtel who slipped home from six yards to make it 1-1.
In doing so, the Slovakian became the first Liverpool player to score at Wembley since Steve McManaman in 1995.
The Reds were now firmly in the ascendancy forced a succession of corners to hem their opponents back - and Skrtel went close with a volley which Heaton did well to collect at his near post on 74 minutes.
The Cardiff stopper then had his palms stung by Downing's drill from distance, while Ben Turner headed wide at the other end when well placed.
With two minutes of normal time remaining, Liverpool were afforded a real let off when a clever free-kick played Miller in behind the wall, but he could only strike his attempt well over to mean extra-time was required to try and separate the teams.
Suarez twice went close in the opening stages of extra-time, first having a long-range drive turned around the base of the post by Heaton before watching his header cleared off the line by Taylor from the resulting corner.
It was another corner that fashioned the Reds' next chance, with Carroll nodding Downing's delivery just wide. It was the striker's last contribution as he was replaced by Kuyt immediately afterwards.
The chances continued to come for Dalglish's men as Bellamy curled over before Johnson arrowed one off target.
However, just three minutes into the second period of extra-time, Liverpool finally made their dominance pay.
Kuyt strode forward and dragged a shot across goal. The ball was cleared by Hudson, but only as far as the Dutchman who found the bottom corner with an instant strike.
But with just moments left on the clock, Turner squeezed the ball home following a goal-mouth scramble at a Cardiff to mean the final would be decided by penalty kicks.
Gerrard, Miller and Adam all missed the first three kicks before Don Cowie scored for Cardiff.
Kuyt then netted for Liverpool and Rudy Gestede struck the woodwork to leave the teams level after three attempts each.
Downing and Peter Whittingham both scored the fourth penalties before Johnson fired home leaving Anthony Gerrard needing to score for Cardiff.
The Bluebirds substitute dragged wide, however, to send the travelling Kop into bedlam and ensure Liverpool's long wait for silverware was finally over.
