China's Cao Yuan and Zhang Yanquan won 10m platform diving gold after Britain's Tom Daley and Pete Waterfield fell from the top spot and out of the medals following a botched fourth dive.
The Chinese teenagers tallied 486.78 points from their six dives to win the event from Mexico's Ivan Navarro and German Sanchez, who took silver, and the American bronze-medallists David Boudia and Nicholas McCrory.
Cao, 17, and Zhang, 18, who won both the Beijing and Moscow legs of the 2012 World Series and also triumphed in February's test event, claimed gold on their Olympic debuts.
It leaves China, seeking the first sweep of eight Olympic diving titles, with two golds from the opening two events after Wu Minxia claimed her third synchronised three-metre springboard Olympic victory alongside partner Hi Ze on Sunday.
A mistake on their fourth dive cost British pin-up Daley and his partner dearly as they surrendered their lead to finish the round, and ultimately the competition, in fourth.
"We had the highest score we have ever got after the first three, but at this level of competition, you can't afford to miss a single dive," said Daley, who will compete in Friday's individual platform.
Waterfield later acknowledged it was his mistake which cost the pair, but Daley refused to point the finger of blame.
"We're a team, that's it, full stop," said the 18 year old. "You win as a team and you lose as a team."
Having won a silver in the same event at the 2004 Athens Games, Waterfield said he was bitterly disappointed.
"It's the worst place to finish at an Olympics, I'd rather finish last than fourth," he said. "We gave it a good go - our last two rounds were really good - but just not enough."
* Agence France-Presse