Liverpool were beaten 5-4 on penalties by Atletico Madrid in the Audi Cup final following a 1-1 draw in Munich.
Keidi Bare gave Atletico the lead on 34 minutes with a rebounded header, after Danny Ward had done brilliantly to keep the initial effort from Angel Correa out.
Liverpool were awarded a controversial penalty late on following Divock Origi's delayed fall after being caught by Gabi, allowing Roberto Firmino to equalise from the spot.
Atletico scored all five of their penalties in the shoot-out, but Jordan Henderson was the unlucky man for Liverpool, seeing his spot kick saved by Miguel Angel Moya's feet.
Liverpool end their pre-season programme against Athletic Bilbao at the Aviva Stadium in Dublin on Saturday, before their first Premier League game at Watford the following Saturday.
Dominic Solanke glanced a header wide early on, before Ben Woodburn's volley from Adam Lallana's cross went wide, but Atletico Madrid scored from the only clear-cut chance of the first half.
After Ward had done superbly to tip Correa's point-blank header onto the bar, Bare cleared up on the rebound with a header of his own into the bottom left corner from eight yards.
Jurgen Klopp made a host of changes in the second half, introducing Henderson, Joel Matip, Firmino, Andrew Robertson and Origi among others, but they struggled to break down a stubborn Atletico.
Origi did go close with an effort from the edge of the box, but it flew just half a yard wide of the near post, before the Belgian helped bring Liverpool back into the game with a questionable fall.
After Gabi had caught the foot of Origi in the box, the striker delayed his fall to the ground, before eventually going over and receiving a penalty. Firmino duly scored, sending Moya the wrong way.
Lucas forced a good save out of Ward from a corner late on, while Robertson struck just wide from range, but the game eventually headed for a shoot-out.
Firmino, Origi, Ryan Kent and Marko Grujic all scored for Liverpool, but Henderson's penalty down the middle of goal was saved, while Atletico got through the shoot-out without a blemish to take the title.