It was the second consecutive Olympic disappointment for Liu, who equaled the world record while becoming the first Chinese male to win an Olympic track and field gold medal at Athens in 2004.
Liu withdrew at the last minute in 2008 due to lingering problems with an Achilles injury that eventually needed surgery to repair.
He was considered the favorite this year and making it through the qualifying heats was looked upon as merely a formality.
Seconds after the gun sounded to start his heat, however, he struck the first hurdle with his lead foot and tumbled to the ground. He clutched at his right ankle while sitting on the track for about 2 minutes.
Liu stood and hopped on his left foot into the nearby tunnel that leads out of the stadium. Medical personnel in the tunnel attempted to coax him into a wheelchair but he suddenly stopped, turned around and hopped toward the track.
With his right foot never touching the ground, he hopped along the right side of the track almost to the finish line as the crowd at Olympic Stadium roared in appreciation of his effort.
He paused momentarily at the final hurdle, hopped out onto the track and it appeared as if he might try to climb over one of the barriers. But then he hopped back around the hurdles and finished his trip to the line.
Britain's Andrew Turner and Spain's Jackson Quinonez, who had run in the qualifying heat, walked out onto the track to assist Liu into the waiting wheelchair.
"I regard him as the best hurdler in history and I have so much respect for him," said Turner, who won the heat. "It was horrible to see him limp off like that so I had to go and help him.
"He's a nice guy and I wouldn't wish that on my worst enemy."