Defending champions United States were knocked out of the men's volleyball competition as Italy wrapped up a 3-0 win at Earls Court.
Italy edged a tense first set 28-26, before winning the next two 25-20, 25-20 to progress to the semi-finals.
They will meet 2008 silver medallists Brazil, who earlier saw off Argentina 3-0.
In the other semi-final, Russia, who beat Poland 3-0, will play Bulgaria after they won 3-0 against Germany.
The US were only ranked fifth for the London tournament after significantly changing their squad since their win in Beijing four years ago.
US captain Clayton Stanley - in what is likely to be his final Games - did his best to offer some resistance with 16 points, but it was not enough to rescue his team.
Russia, from their days as the Soviet Union, lead the all-time medal table with seven gold, four silver and one bronze.
The semi-finals take place on Friday at Earls Court.