Liverpool came from 3-1 down to rescue a 3-3 draw against Leicester City thanks to a strike five minutes into added time from Takumi Minamino.
With the game going straight to penalty kicks after full-time, the Reds then edged through into the semi-finals after seeing off the Foxes 5-4 on penalties.
Arsenal reached the semi-finals in far easier fashion after seeing off League One side Sunderland 5-1 on Tuesday, and will now be looking to reach the final for the first time since 2018 when they were beaten 3-0 by Manchester City.
Liverpool meanwhile are looking at reaching the final for the first time in five years, when they too were beaten by City via spot-kicks.
Meanwhile, the other semi-final sees Chelsea take on Tottenham, with the Blues leaving it late before defeating Brentford 2-0 and Spurs producing an excellent defensive second half display to see off West Ham United 2-1.
Spurs were the beaten finalists last season after a late loss by Manchester City, having beaten the Blues on their way to the final in the fourth round.
Chelsea who like the other three semi-finalists also saw their previous final end in defeat by City in 2019, will have their own happy memories from that run to Wembley though having defeated Tottenham in the semi-final after a penalty shootout at Stamford Bridge.
The two-legged semi-finals are scheduled to take place in January, with the first legs at the Emirates Stadium and Stamford Bridge to be played on the week commencing January 3, with the return fixtures a week later on the week commencing January 10.
Spurs boss Antonio Conte admitted the trophy was now an important target after being paired against his former club.
The confirmed Carabao Cup draw
Arsenal vs Liverpool
Chelsea vs Tottenham Hotspur
First legs to be played on the week commencing January 3, with the the return fixture to be played on the week commencing January 10.