The Azzurri commanded the game for 120 minutes, but were forced to rely on penalties to send England out of the competition.
Euro 2012: England 0 Italy 0 (Italy win 4-2 on penalties)
KIEV, UKRAINE // Why always we? England's footballers might have borrowed a refrain from one of their most mischievous opponents after they fell to their time-honoured penalty shoot-out defeat in Kiev last night.
Alessandro Diamanti, who enjoyed a less than successful stint in England with West Ham United, fired Italy into a semi-final meeting with Germany with the winning penalty, as Roy Hodgson suffered his first defeat as England manager, and a nation went back to the drawing board.
Whether Italy will be good for anything when they get there after two hours of exertions against England is debatable. But at least they deserved to advance.
It was no more than the Azzurri deserved. Italy dominated the 90 minutes regulation and the 30 minutes of extra time as England continued to attempt to rewrite the theory that you need to have the ball for at least some of the game if you are going to win football matches.
While Andrea Pirlo, the Italian schemer, gracefully controlled the midfield more or less unencumbered, the players in white looked like they had cattle-prods in their shoes.
Given their flagrant disregard for possession, England are lucky they have such a good goalkeeper. As an indicator of how besieged their goal has been in this tournament, Joe Hart has made more saves than any other gloveman at Euro 2012.
In the first half of this game, only Glen Johnson, the right-back, had more touches than him for England.
Hart had not lost a competitive game in the colours of the senior national team before last night. For much of the time, the Manchester City No 1 was all that stood between Italy and a semi-final against Germany on Thursday night.
The Italians were inches away from a fourth-minute lead, as well as having a goal of the tournament contender to celebrate, when Daniele de Rossi's first-time drive from distance clipped the inside of the post with Hart well beaten.
England had barely had a touch by then, but as soon as they did get hold of the ball they could have had a goal of their own almost immediately.
Johnson found himself in the centre-forward position with the goal at his mercy, but Gianluigi Buffon, Italy's goalkeeper and captain, pawed away the shot before recovering the ball at the second time of asking.
The Liverpool full-back figured prominently as England asserted themselves, sending in one appetising cross that Wayne Rooney headed over. That was as good as it got for a while for England.
Mario Balotelli, Hart's clubmate at Manchester City, was denied when John Terry recovered to block his shot when the Italian seemed to be clean through on goal.
The tempestuous Italy striker was a ready threat. Before the interval, he troubled Hart with a volley from the edge of the box, was then thwarted by the England defence from yards out, and soon after fired inches over from long range.
All the best chances were falling to the Italians. England were lucky that De Rossi, who had struck the post with an eminently tougher effort earlier, botched a volley just after the restart when merely yards out.
How England remained on level terms was a mystery. Hart foiled Balotelli again, this time with his knees, then Riccardo Montolivo contrived to blaze the follow up over.
There was always the possibility Italy's profligacy would count against them, and England did have their opportunities.
The best of them in the second half fell to Ashley Young. It seems odd to think now, given the tournament he has had, that much hope was invested in the Manchester United winger before England left for Poland and Ukraine.
He summed up an insipid performance - and competition as a whole - by bundling his shot straight at the prone body of Andy Carroll, a second-half substitute for England, when well set in front of goal.
The last opportunity of normal time fell the way of Rooney, who fluffed his attempted overhead kick after England's best attack of the half.
Ashley Cole provided the overlap, but the left-back's cross was over hit. Carroll did well to head the ball back across goal, but Rooney's attempt at the spectacular ended in abject embarrassment. Even in extra-time it was Italy who were in the ascendant, with Balotelli firing in shots and Diamanti clipping the post with a cross.
Antonio Nocerino did have the ball in the back of the net for Italy, but the flag went up for offside.
It was left to penalties to decide Germany's semi-final opponent on Thursday.
Riccardo Montelivo missed for Italy, but Young's effort smacked off the crossbar, and Buffon easily gathered Cole's weak effort, leaving Diamanti to score the decisive kick.