Sterling effort for Liverpool
England forward Sterling struck the Reds' opener at Anfield just as reports of him allegedly taking legal high nitrous oxide were emerging in the press.
His superb goal laid the platform for an ultimately comfortable Barclays Premier League win, which was completed by Joe Allen in the second half.
Newcastle's night went from bad to worse when Moussa Sissoko was sent off for two bookable offences but they were controversially denied a penalty late in the first half.
The defeat was Newcastle's fifth in succession and means they are still not yet completely out of relegation danger, while Liverpool are back within for points of the top four.
It was an eventful night for Liverpool, with a spokesperson saying the club intended to speak to Sterling about the latest reports concerning his lifestyle.
They had also suffered a blow prior to the match with striker Daniel Sturridge ruled out with an injury that could make him doubtful for Sunday's FA Cup semi-final.
His absence initially appeared to matter little as Liverpool - looking to bounce back to form after back-to-back league defeats - made all the early running.
With Philippe Coutinho playing in the central role vacated by Sturridge with Sterling out wide, the Reds were mesmerising in their movement.
Coutinho looked in the mood but Sterling outshone him to hand the hosts the early lead.
The 20-year-old brilliantly controlled a crossfield pass from Jordan Henderson and cut inside to glide past Ryan Taylor and Gabriel Obertan and clip a shot over Tim Krul.
His goal was celebrated fervently by an already pumped-up Anfield, although it was too premature to suggest the youngster had been taken back to heart after his recent contract rumblings.
Liverpool could have been out of sight inside the first half hour as Alberto Moreno burst forward and tested Krul from out wide and Coutinho beat the defence only to err with his final ball.
Sterling shot at Krul and when Coutinho found Henderson with a nifty backheel it seemed Liverpool were in complete control.
But Newcastle, who had appeared jaded after their recent losses, found some life before the break.
Mehdi Abeid first brought Simon Mignolet into the game with a shot from the edge of the area and Liverpool appeared to have been caught out when Dejan Lovren felled Ayoze Perez in the area.
Surprisingly referee Lee Mason - not immune to penalty controversy this season - saw no reason to point to the spot.
Perez was denied again before the break, this time by a brilliant save from Mignolet, after directing a header towards the top corner. Abeid spurned another good opportunity when he shot over but Liverpool regrouped.
They should have doubled their lead just before the hour after Henderson broke down the right and Taylor failed to cut out his pass but Sterling somehow put a gilt-edged chance wide.
Liverpool cranked up the pressure and their second came after more poor defending from the visitors on 69 minutes. This time Mike Williamson failed to deal with a ball into the area and Allen lashed home from close range.
Things began to get worse for Newcastle as Sissoko became embroiled in a needless argument with Glen Johnson and both players were booked for pushing and shoving.
Sissoko was then given his marching orders just five minutes later after a poor challenge on Lucas which could easily have warranted a straight red card rather than a second yellow.
Sterling might have made the win even more comfortable six minutes from time but blazed over when well placed.
That might have given the forward a reality check but it mattered little in terms of the result.