Home side see two Kyle Lafferty efforts ruled out, as well as one by Jonny Evans, as they dominate unadventurous opposition only to see Michael O'Neill denied first win as boss
The hosts dominated from the off, with a deft Dean Shiels chip nearly proving the decisive moment before Daniel De Mota struck a fortunate late equaliser.
It will be a game Northern Ireland will feel they should have won, with Jonny Evans having one effort and Kyle Lafferty two, ruled out, Chris Brunt hitting the post and Luxembourg keeper Jonathan Joubert making a string of saves throughout
The result leaves Northern Ireland boss Michael O'Neill's still searching for his first win as Northern Ireland manager.
O'Neill gave opportunities to Shiels, Shane Ferguson and Ryan McGivern after Friday's away defeat to Russia, with Craig Cathcart, Jamie Ward and Corry Evans dropped to the bench.
The home side started the better of the two and took the lead 13 minutes in courtesy of a deft chip from Sheils after the Rangers man was released by a surging run and slide rule pass by Manchester United centre-half Evans.
Evans then saw a header from a corner ruled out for an infringement inside the box before Kyle Lafferty correctly had an emphatic strike from 25 yards out adjudged offside.
The second half followed the same pattern as the first with Northern Ireland dominating possession, though the home crowd were again incensed after a clinical counter attack, finished by Lafferty, was ruled out after Ferguson was found half a yard offside.
Luxembourg offered little to nothing by way of response, with Joubert kept busy after the interval and making smart saves from Steven Davis and Brunt, before the latter then hit the post from close range.
Northern Ireland were soon made to pay the price for their inability to stretch their lead and Da Mota, who opened the scoring against Portugal last week in spectacular fashion, equalised via a hefty deflection off McGivern.
The result leaves the home side joint bottom of Group F, with a visit to Cristiano Ronaldo's Portugal in October next up for O'Neill's team.