Lionel Messi scored a hat-trick and Neymar added a late fourth against 10-man City, who had goalkeeper Claudio Bravo sent off for handling outside the box. The third element of MSN - Luis Suarez - did not score but was his usual lively presence up front.
Sterling, an impressive performer for City, said: "It was an interesting game - it was a top team we played, we played really well at times and we could have scored a few goals of our own. We handed them some goals as well, and with the sending off it was really disappointing because at that point we were into the game.
"With a team like this we've got to have 11 men on the field working and pressing hard but that wasn't the case and they punished us, so we have to pick ourselves up and go again."
Sterling reflected: "It's a big difference when you give the ball to those players up front - Messi, Neymar and Suarez because they are going to punish you they are going to score goals every time they get a chance.
"That's what we needed to cut out... giving the ball to those guys in areas like that because they are ruthless in front of goal.
"But as I said it's a credit to the boys, we tried to play football like the manager wanted us to, we made a few mistakes but we've got to go again, we know we are a good team and we know exactly what we can do, and we'll continue trying to play out from the back and continue trying to do things because it is working and we gave them a good game today."
City are now one point ahead of Borussia Monchengladbach in Group C after the German side defeated Celtic 2-0.