On 10 July 2007 it was reported that Liverpool F.C. had made a ВЈ14В million offer to the Amsterdam club. On 12 July it was reported that Liverpool and Ajax had agreed a fee in the region of ВЈ11.5В million, and later Liverpool confirmed that Babel would sign a five year contract on 13 July.^[12] He was unveiled on 13 July with Yossi Benayoun. Babel was handed the number 19 shirt. He made his debut on 17 July against Werder Bremen in a friendly. He was due to play in the first round of the Barclays Asia Trophy 2007 but for a delay in the granting of international clearance. This was sorted out in time for the final against Portsmouth.

He made his Premier League debut in the 2007–08 Premier League curtain raiser against Aston Villa away after coming on off the bench. A week later and he made his Anfield debut, coming off the bench against Chelsea. On 1 September Babel scored his first goal for Liverpool against Derby County. Babel scored his first Champions League goal for Liverpool on 6 November against Beşiktaş J.K. after coming on as a substitute. He netted twice in the game and almost completed a hat-trick, from a header from a Harry Kewell cross, but was denied by the crossbar. Babel scored the fourth and last goal in Liverpool's 2007–08 UEFA Champions League group stage match against Olympique de Marseille, which they needed to win. He came off the bench in the second leg of the quarter final against Arsenal in the Champions League to win a penalty and score a goal, with Liverpool winning the game 4–2 (5–3 on aggregate). He also came on as a substitute against Chelsea in the semi-final and despite scoring a goal, Liverpool lost 3–2 in extra time.

Liverpool and Celtic legend Kenny Dalglish has said that Babel has the ability to terrorise defenders in the Premier League with his pace and trickery with the ball. On 13 September 2008, Babel came off the bench to score the winner for Liverpool in a 2–1 victory over Manchester United, his first goal of the 2008–09 season Babel scored his second goal of the season in Liverpool's 5–1 victory over Newcastle United on 28 December 2008. It has to be noted that Ryan Babel underachieved since his goal against Manchester United as a consistent Albert Riera has kept him on the bench most of the time, Liverpool would expect more of him in the 2009-2010 season if they are going to challenge Manchester United for the title. Rafael Benitez said that he will have to learn some new tricks as well.