Slovakia's win put them through to the second round as Group F runners-up to Paraguay who drew 0-0 with New Zealand. Italy finished bottom of the section with just two points.
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Slovakia striker Robert Vittek scored after 25 and 73 minutes and Kamil Kopunek added a third in the 89th for the World Cup debutants at a stunned Ellis Park, where Italian flags stopped waving almost from the start.
Antonio Di Natale and Fabio Quagliarella scored late on for Italy but the group favourites were always chasing the game.
"I take all responsibility, all responsibility for what happened," said Italy coach Marcello Lippi.
"If a team turns up at such an important game like tonight with terror in their heart and their legs and is unable to express its ability it's because the coach didn't train the team as he should."
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Slovakia's overjoyed goalscorer Vittek told a news conference: "It's a huge success. We've moved the limits of Slovak football. We couldn't have dreamt about this."
"Of course, we didn't expect such domination. We were better during the match. We played with our hearts and that's what decided the match today," he added.
BRIGHT START
Slovakia, who made four changes to boost their attacking options given they had to win to have any hope of qualification, started brightly and showed a speed of movement which Italy have severely lacked all tournament.
The Azzurri drew 1-1 with Paraguay and New Zealand in earlier lacklustre displays and more sloppiness led to Slovakia's opener.
Daniele De Rossi gave the ball away and Slovakia attacked straight at the heart of Italy's wide open defence. Juraj Kucka played the ball through for a falling Vittek to score from the edge of the box beyond the reach of keeper Federico Marchetti.
Vittek netted his second at the near post from close range and, after Di Natale pulled one back for Italy after 81 minutes, substitute Kopunek grabbed a third for Slovakia.
Quagliarella made it 3-2 with a delightful long-range chip over Jan Mucha but it was too late for the Italians.
With France also going out at the group stage, it is the first time the two finalists from the previous tournament have failed to make the knockout round.
The amazing defeat brought an abrupt end to Lippi's time as Italy coach and the international careers of captain Fabio Cannavaro and midfielder Gennaro Gattuso after the trio said this would be their last tournament with the national side.
Italy's best chance in the first half came when Slovakia's Martin Skrtel headed narrowly over his own bar, a mark of how poor Italy have been in South Africa, while
