Breakthrough and trophies (04–07)

Liverpool were wracked with injury early in the 2004–05 season, and a foot injury suffered in a September league match against Manchester United shelved Gerrard until late November. He returned to score in the last five minutes of a Champions League group stage match against Olympiacos to secure Liverpool's advancement to the knockout round. He claimed that this was his most important, if not his best, goal for Liverpool to date. However, Gerrard netted an own goal during the 2005 League Cup final on 27 February, which proved decisive in Liverpool's 3–2 loss to Chelsea.
                           

                      Single handedly winning liverpool the champions league trophy (2005)

During a six-minute stretch in the second half of the 2005 Champions League final against A.C. Milan, Liverpool came back from a three-goal deficit to tie the match at 3–3 after extra time, with Gerrard scoring one of the goals. Liverpool's third goal was gained as a penalty from a foul awarded to Liverpool when Gennaro Gattuso fouled Gerrard in Milan's penalty box. Gerrard did not participate in the penalty shootout, which Liverpool won 3–2 as they claimed their first Champions League trophy in twenty years, though he was named the Man of the Match, and later received the UEFA Club Footballer of the Year award.

In regards to his contract issues with Liverpool, Gerrard told the press after the final, "How can I leave after a night like this?" But negotiations soon stalled and on 5 July 2005, after Liverpool turned down another lucrative offer from Chelsea, Gerrard rejected a club-record £100,000-a-week offer. Liverpool chief executive Rick Parry conceded the club had lost Gerrard, saying, "Now we have to move on. We have done our best, but he has made it clear he wants to go and I think it looks pretty final." The next day, Gerrard signed a new four-year deal as Parry blamed the earlier breakdown of talks on miscommunication between the two sides.

Gerrard scored 23 goals in 53 appearances in 2005–06, and in April became the first Liverpool player since John Barnes in 1988 to be voted the PFA Player of the Year. He scored twice in the 2006 FA Cup Final against West Ham United, including an equalizer that sent the match into extra time, and Liverpool won their second consecutive major trophy on penalties. The goals made him the only player to have scored in the FA Cup, League Cup, UEFA Cup and Champions League finals. Gerrard netted a penalty as Liverpool eliminated league rival Chelsea in the 2006–07 Champions League semi-finals to return to their second final in three seasons, which they lost 2–1 to Milan.

Gerrard suffered a hairline toe fracture in an August 2007 Champions League qualifier against Toulouse, but returned four days later to play the entirety of a 1–1 league draw against Chelsea. On 28 October 2007, Gerrard played his 400th game for Liverpool in a league match against Arsenal, in which he scored. He scored in all but one of Liverpool's domestic and European matches during the month of November, and after scoring the only goal in a Champions League away tie against Olympique de Marseille on 11 December, he became the first Liverpool player since John Aldridge in 1989 to score in seven consecutive games in all competitions.