England's Luke Shaw gave his team the perfect start after two minutes during the 16th UEFA European Championship soccer tournament in Wembley Stadium, London.
Italy, unbeaten in 33 matches before this final, slowly edged their way back into the game and were level in the 67th minute when Leonardo Bonucci pounced after England goalkeeper Jordan Pickford turned Marco Verratti's header on to a post.
And after a tense period of extra time failed to find a winner, it was on to penalties and bitter disappointment for England manager Gareth Southgate and his players, who had gone into this final on a wave of expectation and high emotion.
England missed three of their five penalties, Marcus Rashford hitting a post and Gianluigi Donnarumma denying Jadon Sancho before - so cruelly for such a fine young player - Arsenal teenager Bukayo Saka also saw the giant Italy goalkeeper save his spot-kick.
Harry Kane and Harry Maguire scored for England but, while Pickford kept hopes alive with saves from Andrea Belotti and Jorginho, Domenico Berardi, Bonucci and Federico Bernardeschi scored for Italy.
The tearful 19-year-old Saka, who showed such courage to step forward, was consoled by his team-mates and manager, but there was no real consolation for them or the expectant fans packed into Wembley. This is one of soccer fans' saddest day since England's first and only major soccer triumph on 30 July 1966 against West Germany.