An estimated one million people lined the streets of Liverpool to see their team parade the European Champions League trophy through the city.
The players set off on a victory parade just hours after arriving back from Istanbul, where they secured the title by beating AC Milan on penalties.
The city was transformed into a sea of red as crowds 20-deep surrounded the team's red open-topped bus.
Fans climbed rooftops, billboards and traffic signs to get the best views.
The victory parade, led by 20 mounted police officers, passed Anfield before making its way to St George's Hall.
Fans blew fog horns and whistles and waved red and white flags, scarves and banners as they waited for the bus to pass by.
Merseyside Police said between 750,000 and 1m people had gathered in Liverpool to watch the parade.
"Early indications are that we could be looking at up to half a million people, including those who come to St George's Hall at the end of the parade," he said.
Waiting for the parade outside Anfield, one 23-year-old fan hailed Steven Gerrard as a hero. He said: "We were watching it in the pub, but I went home at half time - I felt sick in my stomach. Stevie Gerrard, though - what a hero."
Alistair Tubby, 43, of Litherland, said he never doubted his team would win.
"I'm a season ticket holder and have been a fan all my life.
"I never doubted we would win it again - every side has a dip some time in its history and we've had ours. The glory days are returning."
Steven Gerrard and Rafa Benitez were given a heroes' welcome as they led the team onto home soil at about 1630 BST.
At Liverpool John Lennon Airport the team were cheered by fans before being greeted by the Lord Mayor of Liverpool, Alan Dean, who invited them to take part in the victory parade.
Some fans had stayed in the city centre overnight to keep a good vantage point.
They were among thousands of supporters who spent much of Wednesday night celebrating after the team came from three goals down to beat AC Milan on penalties.
Liverpool's Lord Mayor asked the team to take part in a victory tour
Business experts estimated one in five workers in Liverpool were taking Thursday off after partying into the early hours to celebrate the victory.
But it was not just Liverpool fans who were staying away.
Frank McKenna, of private sector consortium Downtown Liverpool in Business, said many Evertonians may have taken the day off to escape colleagues' jibes.
He said: "From our members' experience today, absenteeism is clearly running quite high at about 20%, but this is for a variety of reasons.
"Obviously, you have got the Liverpudlians ringing in with sore heads but there are also a fair few Evertonians taking the day off as well to avoid the gloating from their colleagues."
The 20% does not include fans who booked the day off in advance as holiday but is made up of "sickies", last minute holiday and lieu days.
Meanwhile, celebrating Liverpool fans have drunk more than 10,000 bottles of champagne to toast the triumph.
Sales have gone through the roof, with more champagne sold in the Liverpool area than over the Christmas and New Year's Eve period.
A spokesman for Sainsbury's said: "We've never seen anything like it. We would usually expect to sell this much champagne at Christmas.
"Certainly, this year, Christmas has arrived very early in Liverpool."