Vardy scored both of the Foxes’ goals, taking his tally to 18, and the first was a stunning strike from the right-hand corner of the penalty area that capped another astonishing night for his team.
That goal, on the hour-mark, was followed by a close-range goal 11 minutes later that gave Leicester a deserved win and maintained their three-point lead at the top of the table.
Leicester might have claimed the lead inside the opening minute when Liverpool handed possession to the hosts and Riyad Mahrez picked up the ball.
He progressed to the edge of the penalty area with minimal resistance before bending a shot narrowly off target.
They went even closer in the ninth minute when Liverpool captain Jordan Henderson was robbed in midfield by Shinji Okazaki and referee Andre Marriner allowed play to continue despite appeals for a free-kick.
The Japan international fed Vardy and raced to the far post to meet his team-mate’s cross, but his header was pushed over the bar brilliantly by Liverpool goalkeeper Simon Mignolet.
Leicester goalkeeper Kasper Schmeichel made an equally fine save moments later from a shot by Emre Can, but an offside flag had been raised against the Liverpool midfielder.
A fine touch from Mahrez from Christian Fuchs’s dipping pass then gave the Algerian another shooting opportunity, but Mignolet was equal to his 20-yard effort.
Liverpool attempted to catch Leicester out with a short corner in the 18th minute, but after working the ball to Lucas Leiva, they saw his cross fly horribly into the stand behind Schmeichel’s goal.
Leicester continued to hold sway with Vardy to the fore and his persistence won a corner from which they could have tested Mignolet.
Fuchs’s delivery found Robert Huth, but the defender headed over.
– Moreno blazes wide –
The Liverpool keeper was required again 10 minutes from half-time when his side failed to deal with a thrown-in and the ball broke to Mahrez.
The winger hit a curling, left-foot shot that was heading for the roof of the net until Mignolet tipped it over.
A rare Liverpool attack caused some worries for Leicester six minutes before the interval when Roberto Firmino spread play to Alberto Moreno on the left, but the full-back blazed a shot wide with colleagues waiting for a cross.
Early in the second half Can should have put Liverpool ahead after combining well with James Milner before collecting a cross by Henderson, but his shot was deflected wide.
Leicester, though, continued to press and Okazaki fired just over after seizing on a poor clearance by Mamadou Sakho.
Then Lucas decided to try his luck from 25 yards, but he blazed his effort over the crossbar.
Moments later Moreno’s cross-shot almost caught out Schmeichel at his near post but the Dane clawed the ball away to safety.
Then, in the 60th minute, Vardy raised the roof at the King Power Stadium with a moment of brilliance.
He collected a clever, lofted pass from Mahrez and sent a powerful, dipping shot from the apex over the area over a stranded Mignolet.
And he doubled his side’s lead 11 minutes later with a poacher’s goal as he prodded a shot past Mignolet after a shot from Okazaki deflected into his path.
Liverpool pushed for a lifeline, but Leicester managed the closing stages of the game well to maintain their superb season.