For the third consecutive game, the Azzurri allowed an early goal and this time they never recovered.
Robert Vittek put Slovakia ahead in the 25th minute, taking advantage of an errant pass from midfielder Daniele De Rossi. Vittek doubled the lead from close range in the 73rd following a corner kick.
Antonio Di Natale scored for Italy in the 81st, but Kamil Kopunek ended Italy's chances eight minutes later, even though Fabio Quagliarella scored in injury time.
It marked the end of an era for Italy captain Fabio Cannavaro and Gennaro Gattuso, who already announced their retirement from the national team after the tournament. Coach Marcello Lippi is also moving on.
Paraguay Advances after Drawing 0-0 with New Zealand
Paraguay moved into the last 16 of the World Cup for the fourth time in its history Thursday after being held to an uneventful 0-0 draw by New Zealand.
Neither team created many scoring chances despite displaying more urgency after the break following a turgid first half at Peter Mokaba Stadium.
Paraguay finished with five points in Group F, two more than New Zealand - which was eliminated after Slovakia beat Italy 3-2 in the other group game to advance.
Paraguay substitute Edgar Benitez sent a low shot that was saved by goalkeeper Mark Paston in the 76th minute in the best chance of the match.
Teammate Cristian Riveros headed straight at Paston from a short corner in the 64th in the only other chance of note.
Playing in only its second World Cup - having lost all three matches in 1982 - New Zealand came into the match after 1-1 draws with Slovakia and then defending champion Italy, a team ranked 73 places above the Kiwis.
New Zealand coach Ricki Herbert, who played in that 1982 tournament, made no changes from Sunday's match against Italy in Nelspruit.
Japan beats Denmark 3-1 to advance from Group E
First-half free kick goals from Keisuke Honda and Yusuhito Endo helped give Japan a 3-1 win over Denmark on Thursday and send the Asian country into the round of 16 of the World Cup.
Japan took a 2-0 lead after goals from free kicks within a space of less than 15 minutes as the Japanese collected their second win in Group E. They ended on six points compared with three for Denmark.
The Japanese reached the knockout round for the second time. They also progressed in 2002 when they were co-hosts, but missed out in two other editions.
Netherlands beats Cameroon 2-1 at World Cup
The Netherlands produced its first flair and finesse of the World Cup on Thursday, beating already-eliminated Cameroon 2-1 in Group E.
Robin Van Persie finished off an end-to-end move in the 36th minute and substitute Arjen Robben rifled a shot off the post in the 83rd minute that Klaas Jan Huntelaar tapped in.
In between, Samuel Eto'o scored from the penalty spot for Cameroon in the 65th.
The Dutch won their group with nine points and will face Slovakia in the round of 16 on Monday in Durban.