England lost to the USA in a sudden-death shootout in the last four of the World League Semi-Finals.
England took an early lead in Johannesburg through Hannah Martin.
But, with England reduced to 10 players after Lily Owsley's yellow card, Jill Witmer equalised with three minutes to go as the match finished 1-1.
Sarah Haycroft scored England's only penalty to cancel out Melissa Gonzalez's strike, but Gonzalez later clinched victory for the USA.
USA play Germany, who beat Argentina 2-1, in Sunday's final while England face Argentina in the third-place playoff.
"We are obviously disappointed with the result," said England coach David Ralph. "It was an intense, tight game that unfortunately didn't go our way."
"This is a great group, though, and we will regroup and look forward to playing Argentina on Sunday."
Head coach Danny Kerry missed his side's final two group games because of illness, and he will not be at the Argentina match.
Kerry's side, who had already guaranteed qualification for November's World League Finals in New Zealand, looked to be on course for the final when they broke the deadlock in the second quarter.
Sophie Bray, on her 100th appearance, found Martin inside the area and she flicked home to finish an impressive team move.
But the USA dominated possession thereafter and could have won it in normal time were it not for England goalkeeper Maddie Hinch.
The Rio 2016 gold medallist made a succession of great saves to deny the world's sixth-ranked side from successive penalty corners in the final quarter.
But, with Owsley off the field, Michelle Vittese combined with Witmer, who neatly touched the ball home to take the game to a penalty shootout.
Gonzalez netted USA's first penalty to hand her side the advantage.
Hinch saved their next four penalties but that feat was matched by USA counterpart Jackie Briggs.
Haycroft took the shootout to sudden death but England captain Alex Danson had her attempt saved as Gonzalez sent USA through.
England starting XI: Maddie Hinch (GK), Giselle Ansley, Laura Unsworth, Hollie Webb, Anna Toman, Sarah Haycroft, Emily Defroand, Susannah Townsend, Nicola White, Alex Danson (c), Sophie Bray
Substitutes: Used: Zoe Shipperley, Grace Balsdon, Shona McCallin, Jo Hunter, Hannah Martin, Lily Owsley; Unused: Amy Tennant (GK)