Match ends, Germany 2, England 1.
England were denied just their second win over Germany after conceding two late goals to lose in the SheBelieves Cup in the United States.
The Lionesses held a deserved half-time lead after Toni Duggan's flicked header from Alex Greenwood's right-wing cross.
Germany levelled when England defender Gilly Flaherty unluckily diverted a low cross past keeper Karen Bardsley.
The European champions nicked a barely-deserved win when Babett Peter coolly tucked in a controversial penalty.
Loss ends England hopes
England's second straight defeat at the new international tournament, which features four of the best five ranked teams in the world, ended their hopes of an unlikely triumph.
A narrow 1-0 defeat in their opener against hosts United States, the current world champions, left them with a difficult task to win the round-robin group competition.
But the World Cup bronze medallists looked set to keep their hopes alive as they led Germany until the 76th minute.
With most of the English players still in pre-season mode before the summer Women's Super League season, Germany's superior match fitness began to tell in the final stages.
However, that had little effect on the two slices of misfortune that took the game away from Mark Sampson's team.
'Officials aren't good enough'
The Lionesses again showed they could compete for long periods against Germany, but they were undone by the decision to wrongly penalise Fara Williams, who was making her 150th international appearance.
Williams, who scored the winning penalty against Germany in the World Cup, appeared to win the ball from forward Alexandra Popp, who fell after kicking the England midfielder's foot.
"It is incredibly tough to take," Sampson told BBC Sport.
"Two games in a row we have stonewall penalties not given to us and a ridiculous penalty given against us. The officials aren't good enough.
"It is frustrating because there were lots of good things in that game for us but we haven't quite got over the line. The decision cost us."
England play their final game against France, who are also winless after losing 1-0 to the US earlier on Sunday.
The teams battle to avoid finishing bottom of the group when they meet on Wednesday (22:00 GMT) in Boca Raton, Florida.
The match will be live on the BBC Red Button and BBC Sport website, with coverage starting at 21:50 GMT.
The US and Germany meet after the England game has finished to determine who will win the tournament.
- 2HenningSubstituted forPeterat 53'minutes
- 22KemmeSubstituted forMaierat 65'minutesBooked at 72mins
- 10MarozsánSubstituted forDäbritzat 45'minutesBooked at 67mins
- 7BehringerSubstituted forGoeßlingat 45'minutes
- 9IslackerSubstituted forMagullat 78'minutes
- 17KerschowskiSubstituted forMittagat 78'minutes
- 6FlahertyBooked at 21minsSubstituted forStoneyat 79'minutes
- 3GreenwoodSubstituted forCarneyat 69'minutes
- 7NobbsSubstituted forDavisonat 83'minutes
- 19DugganSubstituted forKirbyat 87'minutes
- Ekaterina Koroleva
- Shots on Target
Second Half ends, Germany 2, England 1.
Offside, Germany. Alexandra Popp tries a through ball, but Lina Magull is caught offside.
Attempt missed. Alexandra Popp (Germany) left footed shot from the centre of the box is high and wide to the left. Assisted by Sara Däbritz.
Offside, Germany. Kathrin Hendrich tries a through ball, but Alexandra Popp is caught offside.
Substitution, England. Francesca Kirby replaces Toni Duggan.
Attempt missed. Anna Blasse (Germany) header from the centre of the box is high and wide to the left. Assisted by Alexandra Popp with a cross.
Substitution, England. Gemma Davison replaces Jordan Nobbs.
Anja Mittag (Germany) wins a free kick in the defensive half.
Foul by Fara Williams (England).
Goal! Germany 2, England 1. Babett Peter (Germany) converts the penalty with a right footed shot to the bottom left corner.
Delay over. They are ready to continue.
Delay in match Alexandra Popp (Germany) because of an injury.
Penalty Germany. Alexandra Popp draws a foul in the penalty area.
Penalty conceded by Fara Williams (England) after a foul in the penalty area.
Attempt blocked. Sara Däbritz (Germany) left footed shot from outside the box is blocked.
Substitution, England. Casey Stoney replaces Gilly Flaherty.
Foul by Leonie Maier (Germany).
Stephanie Houghton (England) wins a free kick in the defensive half.
Attempt saved. Sara Däbritz (Germany) left footed shot from the left side of the box is saved in the bottom right corner. Assisted by Alexandra Popp.