The 21-year-old set the first new world best time at the six-day Jakarta meet, storming to gold in 26.98s -the first time a woman has broken the 27-second barrier.
Japan's Rikako Ikee crushed it in the Women's 100m butterfly to win her fourth gold in three days, while Chinese giant Sun Yang scooped his third as the Asian rivals fought tooth and nail for supremacy of the pool.
Liu shaved eight hundredths off countrywoman Zhao Jing's previous bodysuit world best set in 2009.
Fu Yuanhui, also of China, took Silver in 27.68s with Japan's Natsumi Sakai claiming Bronze.
Ikee complained of being ‘shattered’ after the morning heats but showed no signs of fatigue in the final as she won in a Games record 56.30s.
Her time was over a second clear of China's Zhang Yufei and comes just 10 days after Ikee claimed the Pan Pacific title in Tokyo, Japan.
World champion Sun powered to Gold in the 400m freestyle after winning the 200m and 800m titles earlier in the week, also equalling the record of eight Asian Games swimming Gold medals held by compatriot Xu Yanwei.
The three-time Olympic Gold medallist clocked a winning time of 3:42.92s - more than four seconds clear of Japan's Naito Ehara.
Japan's Yasuhiro Koseki beat countryman Ippei Watanabe by a fingertip to win 200m breaststroke Gold.
Koseki went out strong and clung on to win in 2:07.81s - pipping world record holder Watanabe by one hundredth of a second.
Earlier, China's Yu Hexin secured Gold in the Men's 50m free in 22.11s, from Japanese pair Katsumi Nakamura (22.20s) and Shunichi Nakao (22.46s).
Yui Ohashi hit back for Japan with a runaway victory in the Women's 400m individual medley, winning in 4:34.58s from Korean Kim Seoyeong (4:37.43s) and fellow Japanese Sakiko Shimizu (4:39.10s).
China's women's 4x200m victory kept their noses in front of Japan with 11 gold medals to 10 for their fierce rivals.
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