Against all the odds Liverpool ended Rafa Benitez's first season as Champions of Europe for a fifth time when they beat AC Milan in the final in May 2005. During a six-minute stretch in the second half, 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. As everyone in football knows, Liverpool went on to win the Champions League 3-2 on penalties.
Gerrard's contribution, like all those wearing Red that night, was immense but if it wasn't for Gerrard Liverpool would not have reached the Final. Gerrard famously said in the build up to the last Group game against Olympiakos that he didn't want to wake up the next morning facing the prospect of playing in the knockout stages of the UEFA Cup. Liverpool looked as though they were on their way out at half time as they trailed 1-0.
They needed to win by two clear goals, so as it stood, they needed to score three goals in the second half. Liverpool turned the game round to be leading 2-1 going into the last five minutes. Gerrard then produced a moment of magic as he smashed an unstoppable 25-yard half volley into the Kop net to send Liverpool through to the knockout stages. He later claimed that this was his most important, if not his best, goal for Liverpool.
All seemed well for Gerrard and Liverpool as he declared after the final, "How can I leave after a night like this?" But it all turned sour as contract 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. All seemed lost as Liverpool chief executive Rick Parry conceded that 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." Twenty four hours later cue about turn as Gerrard signed a new four-year deal as Parry blamed the earlier breakdown of talks on miscommunication between the two sides.
The next season, 2005-06, Gerrard scored 23 goals in 53 appearances, and in April became the first Liverpool player since John Barnes in 1988 to be voted the PFA Player of the Year. Another fantastic Cup Final appearance followed a month later in May when Gerrard scored twice in the 2006 FA Cup final against West Ham United. His second equaliser came in the final 30 seconds or so when he smashed a 35-yard blockbuster firmly passed Shaka Hislop in the West Ham goal. Steven Gerrard's performance was that good, the Final has since been dubbed "The Steven Gerrard Final".
Another milestone resulted as the goals made him the only player to have scored in the FA Cup, League Cup, UEFA Cup and Champions League finals. Gerrard scored in a league match against Arsenal On 28 October 2007, a fixture that saw Gerrard play his 400th game for Liverpool. When he scored Liverpool's 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.