The Chelsea striker saw his spot-kick saved as Team GB's fairytale Olympic run comes to an end with the familiar heartbreak of a penalty shootout
Sturridge saw his spot-kick saved by substitute goalkeeper Lee Bum-Young after all eight of the previous penalties had been converted, and Celtic's Ki Sung-Yeung netted to send his side into the last four.
Aaron Ramsey had earlier cancelled out Ji Dong-Won's opener from 12 yards and then missed another spot-kick as the two sides played out a contest low on quality but high on drama.
The result ends Team GB's involvement in the Olympic football after the women's side crashed out to Canada at the same stage on Friday evening, with the nature of this defeat all the more galling.
Perhaps intimidated by the capacity crowd at the Millennium Stadium, the hosts started tentatively. Their opponents took full advantage of the opportunity to dominate the opening exchanges, and on 15 minutes Jack Butland was forced into a flying stop to deny Ji.
A breakthrough looked simply a matter of time, and so it proved on 29 minutes when Ki’s lay-off found Ji around 20 yards out, and the Sunderland man’s swerving strike deceived Butland as it flew into the far corner.
Stung into action, Team GB poured forward with greater purpose, and was granted a chance to level the scores when Ryan Bertrand’s scuffed shot struck the arm of a sliding Oh Jae-Suk in the penalty area. The right back was booked for his trouble, and Ramsey’s low spot-kick just about crept under Jung Sung-Ryong.
All of a sudden panic reigned in the South Korea defense, and five minutes later Sturridge went down under the clumsy challenge of Hwang Seok-Ho.
Once again referee Wilmar Roldan pointed to the spot, and once again Ramsey stepped up. His second effort was no more tame than his first, but this time Jung parried it away, and the Welshman was left cursing a golden opportunity missed as the halftime whistle sounded.
Both sides emerged for the second period with a more cautious mindset, as if the fact a semifinal place was at stake had just dawned on them, although Tom Cleverley was unfortunate not to give Team GB the lead on 49 minutes when Craig Bellamy’s excellent cross somehow managed to evade him at the near post.
As the closing stages approached chances grew fewer and further between. Ji caused panic in the Team GB defense on 84 minutes when he headed Ki’s floated ball in dangerously back across goal, but none of his teammates had gambled on a late run into the box.
With five minutes of normal time to go Pearce replaced the tiring Bellamy with Giggs, much to the delight of the frustrated Millennium Stadium crowd, but the Manchester United veteran proved unable to create a decisive breakthrough and the match went into extra time.
It was South Korea which began brighter after the restart, and Butland atoned for his earlier mistake by pulling off an excellent save to deny Koo Ja-Cheol from the angle. Ji pounced on the goalkeeper's parry, but could only direct his header well wide.
In the dying moments the tireless work-rate of Sturridge looked to be Team GB's best hope of a winner but, with both sides too weary to carve each other open and too afraid to take the risk, the contest slid intevitably towards penalties.
In the shootout, Ramsey, Cleverley, substitute Craig Dawson and Giggs all netted for Team GB as all of the first eight penalties were converted. But Sturridge saw his effort saved by substitute goalkeeper Lee Bum-Young, and Ki fired high into the net to send South Korea into the semifinals.