Jordan Pickford stopped two Italian penalties in a decisive shootout and kept Roberto Mancini's team at bay with a string of fabulous saves in regulation play - but was powerless to prevent England from losing the European Championship final at Wembley.
Everton goalkeeper Pickford conceded only two goals in seven matches in the tournament, including an equaliser for Italy defender Leonardo Bonucci to cancel out Luke Shaw's second-minute goal on Sunday.
Italy were on top for large parts of 120 minutes of football, sending six of 19 shots on target – England had five attempts and tested Gianluigi Donnarumma with only two of them – and hogging 66 per cent of the ball.
But Pickford put England in the box seat in the shootout, diving to his left to deny Italy's second penalty taker, Andrea Belotti.
Harry Kane and Harry Maguire scored England's opening two penalties, after Domenico Berardi stroked in the Italians' first.
Marcus Rashford struck a post and Italy keeper Donnarumma saved from Jadon Sancho, giving Jorginho the chance to hit the winning penalty after successful kicks from Bonucci and Federico Bernadeschi.
But Pickford sprung to his right to brilliantly keep out the effort from Chelsea midfielder Jorginho, whose spot kick won Italy's semi-final against Spain, and become the first England keeper to save two penalties in a shootout.
Bukayo Saka needed to score to keep England alive but was foiled by Donnarumma, named player of the tournament following a series of excellent displays.
England started like a house on fire and within 120 seconds Shaw burst forwards to convert a cross from fellow wing-back Kieran Trippier and give Gareth Southgate's side a dream start to the country's biggest football match for 55 years.
Pickford was rarely troubled in the opening 45 minutes, with England purposeful in attack and smothering Italy's trio of midfield technicians.
The England number one, earning his 38th senior cap to add to 50 for the Three Lions' age group teams, was much busier after half-time, as Italy began to control possession and the tempo of the match.
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Pickford reacted smartly to beat away Lorenzo Insigne's drive at his near post after 57 minutes. And the 27-year-old was extended again five minutes later, flying to his left to push out an angled drive from Federico Chiesa.
But Italy were increasingly irresistible, pushing England back and dominating the ball and territory.
Maguire headed behind a wicked cross from Italy's left midway through the second half and from the resulting corner Pickford showed terrific reflexes to turn Marco Verratti's header onto the post.
Centre-half Bonucci, outstanding for Italy next to equally imposing defensive partner Giorginio Chiellini, was first to the rebound and touched home from one yard.
Southgate tweaked his personnel and tactics to try to subdue the offensive-minded Italians, introducing Saka for Tripper and reverting to a back four.
England regained a measure of composure but it was still Italy making most of the running.
As such, Donnarumma was a virtual spectator in extra-time, save for one punched clearance, while Pickford remained front and centre.
He was alert to clear a menacing cross from Emerson with substitute Bernadeschi poised to pounce, then clutched a dipping Bernadeschi free-kick from 25 yards.
Italy, for all their growing superiority, could ultimately breach England's rearguard only once, setting the stage for penalty drama.
Pickford made his second and third major competition shootout saves – adding to one against Colombia at the 2018 World Cup – but Italy, under the leadership of former Manchester City manager Mancini, won their second European Championship to go beside the country's four World Cup titles.
Pickford recorded five clean sheets in the tournament, showing precisely why manager Southgate unequivocally backed him as his first-choice keeper back in November.
Former Everton striker Gary Lineker, working for BBC television, called Pickford "England's best player on the night".
"He made some great saves," added Lineker.
On the same station ex-England defender Rio Ferdinand praised Pickford's "excellent" performance and noted how the Everton player "grew" in line with the heightened pressure of penalties.
England's wait for major success extends to a 56th year at least, then, with a straightforward-looking qualifying group to complete before 2022's Qatar World Cup.