Jose Mourinho's men were in sluggish form as they laboured to a disappointing draw in the Catalan capital
With one eye on the Copa del Rey final, Jose Mourinho named a weakened side and it fell behind to los Periquitos midway through the first half when Christian Stuani broke the deadlock. Gonzalo Higuain equalized before the hour mark but Madrid failed to turn possession into goals, leaving with just one point and thus gifting the title to Barca.
In a low-key start to proceedings, an Angel di Maria effort that was comfortably saved by Kiko Casilla in the 11th minute was the only real effort on target during the early exchanges.
It seemed as though the slow start had dulled the wits of los Blancos and in the 23rd minute they conceded the game's first goal.
Sergio Garcia stopped Joan Verdu's corner from going behind, wrapping his foot around the ball and cutting back into the center where Stuani waited to divert the ball into the back of the net.
The Uruguayan should have added a second four minutes later as he raced behind the defense to meet Verdu's pass. He let the ball run across him before attempting to poke it into the corner, but Diego Lopez stayed big and got his body in the way.
Madrid continued to struggle to assert themselves on the game, with Hector Moreno seeing a seemingly legitimate goal ruled out for an ambiguous foul in the area.
At the other end, Espanyol's well-organized defense remained compact and restricted the chances for los Merengues to produce efforts on Casilla's goal.
Following a very limp showing in the final third during the first half, Mourinho brought on Karim Benzema. However, it was the hosts who threatened first after the interval.
Mubarak Wakaso and Verdu combined brilliantly on the left but Nacho stopped the Ghanaian's cross from finding Garcia at the back post with a crucial interception.
With los Blancos still struggling, Mourinho introduced Cristiano Ronaldo and in the 58th minute Madrid finally found the net. Higuain got in front of Moreno and glanced a header into the far corner, past the despairing keeper.
The game quickly returned to its sluggish tempo as Madrid was unable to harness the momentum that the goal should have given them.
The visitors were in total control of possession but they were unable to translate that into chances to score a winner and Espanyol held on for the final few minutes after Victor Sanchez was shown a red card for a horrible tackle on Higuain.
In failing to win the game, Real Madrid ended its own challenge for the title and must now look to the Copa del Rey for a last chance to win some silverware this campaign.