England were denied a place in the final of the U19 European Championship after two goals from Italy left-back Federico Dimarco.
Aidy Boothroyd's side, who beat France, Holland and Croatia to reach the semi-final in Mannheim, were beaten 2-1 after an Alberto Picchi own-goal in the 85th minute briefly gave them hope.
Left-back Dimarco opened the scoring with his third penalty of the tournament in the 27th minute after Fikayo Tomori fouled Andrea Favilli and doubled the lead with a fine free-kick on the hour.
Defeat consigned the Three Lions to a third semi-final failure at this level, although their progress to the last four has at least secured their place at next year's U20 World Cup in South Korea.