Having overcome Mexican second-tier club Dorados 3-0 on Thursday, the Canaries were brought back down to earth at Buck Shaw Field on Saturday as they went behind early and were unable to break down the Earthquakes' defence throughout the 90 minutes.
Trinidadian attacker Cordell Cato scored the only goal of the game in the seventh minute when he burst onto Russell Martin's under-hit back pass and slotted the ball past Norwich goalkeeper Mark Bunn.
New signing Ricky van Wolfswinkel made his first appearance for Norwich since joining the club from Sporting Lisbon but apart from winning a corner in the 26th minute, the 24-year-old Dutchman failed to produce much in the final third for the Premier League club.
In the second half, Norwich's other new Dutchman, former Twente midfielder Leroy Fer, came off the bench to make his debut for the club and the 23-year-old pulled a shot wide just after the break.
Hughton's men continued to struggle in the second half, while San Jose went closest to scoring when substitute Adam Jahn somehow failed to convert from inside the six-yard box in the 74th minute.
But the Earthquakes held on for victory, while Norwich have just one more game on their stateside tour against Portland Timbers on Wednesday.