In what was expected to be a tight last 16 encounter, individual and collective mistakes cost England dear, and although they looked like getting back into the game after falling 2-0 behind, susceptibility to fast German counter-attacking meant more danger at the back.
A major talking point arrived with the score at 2-1, when Frank Lampard's half-volley smashed against the crossbar and bounced over the goal-line, though the officials did not award the goal, the opposite to what occurred so famously in 1966. Things could have been very different afterwards, but it is the Germans who will take confidence as they progress into the quarter-finals. For England, it will be a summer of soul-searching.
For the first time in his tenure England coach Fabio Capello named an unchanged line-up, which meant starts for John Terry, Ashley Cole and Lampard, but again Joe Cole would begin on the bench.
It was the left-back's 14th England appearance at a World Cup - only Peter Shilton has more, and there were none more dependable than the Chelsea man in the three group games of this World Cup, so it was a major surprise that the Germans' first chance of the game came down his side.
Mesut Ozil found space in the channel and bore down on the England goal, but he shot straight at David James who saved with his feet.
Ten minutes in Terry had to quash a German counter-attack by making a string block, and then Cole copied his club captain with a ferocious ball-winning challenge on Thomas Muller.
England were enjoying possession without making chances, their first shot being a Lampard free-kick that was sent straight into Germany's defensive wall after the midfielder had been cut down.
Almost immediately Germany went to the other end and took the lead.
A Manuel Neuer goal-kick evaded both Terry and Matthew Upson in central defence, but not Bayern Munich forward Miroslav Klose who ran on and slotted past James with the outside of his right boot.
On the half-hour the same player should have scored a second but James prevented him with some alert goalkeeping, though there was nothing the 39-year-old could do a minute later when the Germans worked the ball across to Lukas Podolski in space inside the area, and the Cologne forward smashed it beneath the 'keeper and into the far corner.
England's World Cup sat on a knife edge, something major would need to change.
Lampard almost pulled a goal back from Milner's cross, and then Upson, up for a corner, did, as he leapt high and headed home Steven Gerrard's cross.
Within two minutes Lampard sent home a brilliant dipping half-volley that bounced two feet over the line, the type of goal we've seen time and again at Stamford Bridge.
But when there are big decisions involving Chelsea players on the international stage, they tend to go against us, and the Uruguayan linesman failed to acknowledge the ball had crossed the line, and failed to award the goal.
It was another major setback at a time when England were in the ascendancy, but after a chaotic first half, they would probably have taken being 2-1 down at half-time, if it was offered.
Six minutes into the second period Lampard lined up a second free-kick of the afternoon, some 35 yards out. Again, at Stamford Bridge we've seen them go in, and this was so, so close.
The 32-year-old rifled it hard at goal, but again the ball slammed against the crossbar, this time rebounding up into the air rather than down, and again the Germans survived.
On 64 minutes the Chelsea count on the field rose to four, with Joe Cole on for James Milner, operating down the right flank.
It was unfortunate for the winger that almost immediately after his introduction, Germany snatched a third. Lampard's free-kick hit the wall, Gareth Barry lost possession high up the field and the German attack broke quicker than the England defence could chase them, the ball eventually ending up with Muller who fired past James.
Three minutes later the dream was well and truly over, as another break saw Ozil sweep the ball across the box for Muller to smash home. 4-1, 20 minutes left, game over.
Gerrard and Wayne Rooney almost combined to pull one back 10 minutes from time but Neuer pulled off a superb save from the Liverpool man.
Former Chelsea winger Shaun Wright-Phillips replaced former Blues right-back Glen Johnson with four minutes remaining, with time only for Lampard to fire in another speculative effort from distance which Neuer held comfortably.
