Gareth Southgate’s men appeared to simply run out of steam in the second half of extra-time, and Juventus striker Mandzukic’s slotted finish on 109 minutes put Croatia through to their first World Cup final.
They will return to Moscow on Sunday to face France.
The match went to extra-time and penalties after Kieran Trippier’s stunning early free-kick was cancelled out by Ivan Perisic’s clever flick on 68 minutes.
England looked rattled in the immediate aftermath of Perisic’s goal, and could have gone behind to another Perisic goal after the experienced midfielder capitalised on a defensive mix-up only to see his shot strike the post.
The young England players held on, however, and would have arguably been the more relieved of the two sides to get to extra-time.
However, Mandzukic capitalised on another breakdown in communications to send Croatia to the final.
That key trio Mandzukic, Perisic, and Modric boast more combined caps than the entire England starting eleven, only serves to highlight the gulf in experience that was a huge factor in extra-time.
Southgate’s young charges have impressed in this tournament, and are virtually assured of a hero’s welcome on their return home, but they found an implacable Croatia side just one hurdle too far.