Wasps failed to make it six out of six in the Amlin Challenge Cup Pool round after going down 19-17 to Racing Metro in Paris on Thursday.
Racing fly-half Jonathan Wisniewski was the hero, landing a penalty with the final kick of the game to secure the win.
Racing fly-half Wisniewski held his nerve from just to the right of the posts after opposite number Danny Cipriani was penalised for a high tackle on him.
Tom Varndell scored a try in each half as Wasps, needing a win to guarantee top seeding in the quarter-finals, led by one point heading into the closing stages.
But Wisniewski's late intervention ensured the Guinness Premiership team were left empty handed.
Racing, who named a strong line-up despite having already been eliminated from the competition, produced an impressive comeback from an early 10-3 deficit.
The Top 14 outfit moved 16-10 ahead after being awarded a penalty try in the 59th minute.
But Varndell struck for the second time five minutes later and Cipriani's touchline conversion looked to have settled matters in favour of his side before his late indiscretion opened the door for Wisniewski to have the final say.
Wasps had been under pressure throughout the opening exchanges before Varndell turned the game on its head with an opportunistic try.
Ben Jacobs' hopeful hoof upfield from deep inside his own half created the chance for Varndell to stretch his legs, the Wasps winger outpacing the covering defence with ease.
He also required good footballing skills to complete the end-to-end break, twice tapping the ball forward before handing off Mani Vakaloa and touching down in the right corner.
Cipriani added the conversion and also slotted a penalty to give the visitors a 10-3 lead but, with Racing's pack being constantly penalised for infringements at the breakdown, it should have been more.
The Wasps fly-half missed two penalties in quick succession and, in contrast, Racing were picking up points from each foray upfield - Wisniewski landing a penalty and drop goal to reduce his side's deficit to one point shortly before the half-hour mark.
Despite a sustained spell of pressure from Wasps, no further points were added before the interval.
Wasps continued to press in the early stage of the second half and it took a last-ditch tackle from Francois Steyn to deny Dan Ward-Smith a try.
The South African managed to flip the Wasps number eight onto his back and prevented him getting the ball down between the posts.
That escape appeared to revive Racing Metro and in particular their forwards, who took total control of the breakdown.
Wasps were forced to resort to illegal tactics to stop the French side's march upfield and, after blowing up for the latest in a string of penalties, Welsh referee James Jones lost patience and sent Ward-Smith to the sin-bin.
Jones was in the thick of the action shortly afterwards, awarding Racing a penalty try after Wasps hauled down a scrum close to their own line.
Wisniewski kicked the conversion to give the Parisians a 16-10 advantage entering the final quarter of the match.
Just as Racing looked to be turning the screw they were hit by another Varndell try as 14-man Wasps regained the lead.
Cipriani's wayward mis-pass bounced in midfield before Jacobs picked up the loose ball and put through a grubber for Varndell to pounce on in the right corner.
The difficult conversion was landed by Cipriani to put the Guinness Premiership team one-point ahead with 16 minutes remaining.
And Wasps, now back to their full complement, were almost in again in the 67th minute when Dan Scarborough just managed to prevent David Lemi scoring in the left corner after another kick through.
Racing threw caution to the wind during the closing stages but could find no way through Wasps' stout defence until the last minute when Cipriani was pulled up for a neck-high tackle on Wisniewski.
The Racing stand-off brushed himself down and, with the final act of the game, his kick was straight and true to deny Wasps.
For Racing Metro:
Try: Penalty try
Pens: Wisniewski 3
Drop goal: Wisniewski
Tries: Varndell 2
Cons: Cipriani 2
Racing-Metro:15 Brent Ward, 14 Dan Scarbrough, 13 Andrea Masi, 12 FranÃ§ois Steyn, 11 Mani Vakaloa, 10 Jonathan Wisniewski, 9 Nic Berry, 8 Sebastien Chabal,7 Fabrice Culine, 6 John Leo'o, 5 Lionel Nallet, 4 Santiago Dellape, 3 Craig Smith, 2 Benjamin Noirot, 1 Clement Baiocco.
Replacements: 16 Olivier Diomande, 17 Mikaele Tuugahala, 18 Mehdi Merabet, 19 Jacques Cronje, 20 Jerome Fillol, 21 Henry Chavancy, 22 Bernard Le Roux, 23 Simon Raiwalui,
London Wasps:15 Mark Van Gisbergen, 14 Tom Varndell, 13 Ben Jacobs, 12 Dominic Waldouck, 11 David Lemi, 10 Danny Cipriani, 9 James Honeyben, 8 Dan Ward-Smith, 7 Serge Betsen (C), 6 John Hart, 5 George Skivington, 4 Marty Veale, 3 Ben Broster, 2 Rob Webber, 1 Tim Payne.
Replacements: 16 Joe Ward, 17 Gabriel Bocca, 18 Bob Baker, 19 Dan Leo, 20 Will Matthews, 21 Warren Fury, 22 Dave Walder, 23 Steve Kefu.
Referee: James Jones