Canada sensationally ended a 36-game winless run against the United States, with Jessie Fleming's penalty securing a place in the women's football final at the Tokyo Olympics.
USA had 17 attempts on Monday but a second defeat at the Games – they had gone down 3-0 to Sweden in their opening group fixture – means the reigning world champions will not have a chance to secure gold in Japan.
There was controversy surrounding the winning goal, too, as a VAR check resulted in Canada being awarded a penalty for a foul by Tierna Davidson on Deanne Rose in the 74th minute.
Substitute goalkeeper Adrianna Franch, who had replaced the injured Alyssa Naeher in the first half, guessed correctly but Fleming's penalty still found the net.
Canada stubbornly held on for the remainder of the contest to secure a first triumph over their rivals since March 11, 2001.
While USA can still claim a bronze medal, Megan Rapinoe did not hold back when assessing the impact of the result, particularly against opponents they have become accustomed to beating through the years.
"It's a bitter one to swallow. We never want to lose to Canada. I don't think I ever have, so it's a bitter one," Rapinoe said.
"Still a lot to compete for. It's not the colour we wanted, but there's still a medal on the line and that's a huge thing. We want to win that game, but this sucks. It sucks."
Asked why USA had struggled so much to find form during the tournament, Rapinoe replied: "I feel like we haven't had our joy a little bit.
"It just hasn't flowed for us, hasn't been easy. It's not for a lack of effort, or anyone not giving everything they have. It just didn't click for us.
"I don't know if it was roster rotation, I know it's a tough tournament when trying to save people, but our bench is as deep as hell. I don't think we can put it on that, and I can't quite put my finger on it.
"We just didn't have that juice that we normally do."
USA had been aiming to strike Olympic gold for a fifth time having missed out on a medal of any colour at Rio 2016, where they lost to Sweden on penalties in the last eight.
The Swedes lost to Germany in the final five years ago but could still go one better this year – they take on Australia in the second semi-final.