Celtic's slow start to their summer transition came back to bite them as they were knocked out of the Champions League qualifiers by Midtjylland.
Ange Postecoglou saw his side give up a lead again as they slumped to a 2-1 defeat after extra-time in Denmark to lose 3-2 on aggregate and miss out on the group stages for a fourth consecutive year.
Callum McGregor gave Celtic the lead with a stunning strike in the 48th minute but Awer Mabil levelled on the hour mark just after James Forrest had missed a sitter.
Celtic had the better of the majority of the 90 minutes but ran out of steam and offered little response to Raphael Nwadike's strike early in extra-time.
While Midtjylland march on to face PSV Eindhoven, Celtic will travel to the Czech Republic to take on Jablonec in the Europa League third qualifying round next Thursday.
Midtjylland: Lossl (6), Andersson (7), Dalsgaard (8), Sviatchenko (7), Paulinho (7), Juninho (7), Evander (8), Mabil (7), Charles (6), Junior Brumado (6), Sisto (7).
Subs: Cools (6), Nicolaisen (6), Dyhr (6), Mads Hansen (6), Lind (7), Onyedika (8).
Celtic: Bain (7), Ralston (7), Welsh (6), Murray (6), Taylor (5), Turnbull (6), Soro (5), McGregor (6), Edouard (4), Abada (4), Christie (6).
Subs: Ajeti (5), Rogic (n/a), Forrest (6), Montgomery (n/a).
Man of the match: Evander.
How Hoops CL hopes fizzled out
Postecoglou, who was appointed on June 10, three and a half months after Neil Lennon left, expressed frustration over the club's "hesitation" in the transfer market ahead of the first leg and admitted his side would never be as badly prepared for a big match again.
Although Celtic have made five summer signings, two of them are still in quarantine and only 19-year-old Israeli winger Liel Abada featured in Denmark with former Sheffield Wednesday pair Liam Shaw and Osaze Urhoghide left on the bench.
The dearth of options at the back highlighted the challenges facing Postecoglou. With Kristoffer Ajer recently departed, replacement Carl Starfelt in quarantine, Christopher Jullien still working back from a serious knee injury and Nir Bitton suspended following his needless first-leg red card, Celtic had to rely on youth.
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- Champions League third qualifying round draw
- Champions League results | Fixtures
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Stephen Welsh partnered 18-year-old Dane Murray in central defence while Anthony Ralston continued at right-back and impressed with his forward play and two crucial second-half blocks.
Greg Taylor, at 23, was by far the most experienced of the back four but the left-back lost his marker for the hosts' equaliser.
Postecoglou dropped Vasilis Barkas after the Greek goalkeeper gifted Midtjylland their Parkhead equaliser and handed Scott Bain the gloves.
Celtic threatened twice early on when David Turnbull's 25-yard strike was tipped over before Odsonne Edouard volleyed a couple of yards over the bar from the midfielder's corner.
Celtic team news
- Ange Postecoglou made a big call in dropping goalkeeper Vasilis Barkas in place of Scott Bain.
- Celtic lined up with a highly-inexperienced central defence against Midjtylland in Denmark on Wednesday. Stephen Welsh, 21, and 18-year-old Dane Murray in central defence finished the 1-1 first-leg draw in the Champions League qualifiers following Nir Bitton's red card.
Edouard almost had another chance later in the half after great footwork and a neat through ball from Ryan Christie but the home goalkeeper was out quickly to snuff out the danger.
Celtic generally controlled possession in the first half with the Danes only threatening from a couple of set-pieces.
The visitors were on the front foot at the start of the second half and the pressure paid off through McGregor's moment of magic. Turnbull's corner was half-cleared and the skipper chested the ball down and volleyed into the top corner from 25 yards.
Bain fumbled a low cross without being punished before Forrest shot wide from 14 yards after being set up by Turnbull's flick.
Postecoglou barely had time to get his head out of his hands before the hosts equalised. Mabil ran across Taylor and guided a free header past Bain from 10 yards.
Forrest had only replaced the quiet Abada a minute before missing his chance and the winger looked to have another opportunity with seven minutes left after Christie's brilliant first-time pass. But Brazilian defender Paulinho recovered ground to make a superb block.
The Danes finished the 90 minutes strongly and had a glorious chance to win it in stoppage-time when 18-year-old forward Victor Lind got in between the Celtic centre-backs but volleyed wide in space from 12 yards.
Midtjylland were ahead four minutes into extra-time. Turnbull got caught out with a ball over his head following a blocked free-kick and Nwadike had time to control Mads Hansen's square ball before finishing high into the net from six yards.
Bain made good saves from Hansen and Lind to keep the score down.
Celtic boss Ange Postecoglou: "I take responsibility. I'm the person who has been put in charge. We haven't got players in, I obviously haven't done a good enough job convincing people we needed to bring people in.
"I'm not going to shy away from it. I don't say that because I'm some kind of martyr, I just think that's my responsibility, that's why I was brought in.
"I have been trying to be as forceful as I can about what we need to bring in, and the challenges we have had are well chronicled.
"Irrespective of the result tonight, we still need reinforcements. We had a really young squad out there, young players on the bench. It's not a situation we need to be in."
Analysis: Are we really that surprised?
Sky Sports' Andy Walker:
"It's a huge blow but I think you'll find a huge number of Celtic supporters who won't be surprised.
"Postecoglou highlighted last week that he wasn't happy with the lack of transfer activity, and I think when you go with so much inexperience in big games like Celtic have done in Glasgow and here tonight, then it's going to come back and hurt you.
"Midtjylland played a good game and had a stronger squad - they had more legs and they had more energy. Celtic were never in it in extra-time. In the end, I think they deserved it and you could see a goal coming.
"Sadly for Celtic supporters, they'll have to settle with a qualifier for the Europa League."
Champions League round-up: PSV sail through
PSV Eindhoven advanced to the Champions League's third qualifying round after beating hosts Galatasaray 2-1 on Wednesday to win the second round tie 7-2 on aggregate.
Noni Madueke's deflected shot eight minutes before half-time put PSV ahead on the night and captain Marco van Ginkel extended the lead from a Mario Gotze cross just before the hour-mark.
The visitors were reduced to 10 men when Olivier Boscagli picked up a second yellow card for a foul on Mbaye Diagne in the 73rd minute. Substitute Diagne then volleyed in an eye-catching goal 11 minutes later, but it was a mere consolation for Galatasaray.
PSV will face Danish side Midtjylland in the next round, while Galatasaray dropped into the third qualifying round of the Europa League, where they will meet St Johnstone.
Champions League third qualifying round draw:
- Malmo vs Rangers
- Genk vs Shakhtar Donetsk
- Monaco vs Sparta Prague
- PSV Eindhoven vs FC Midtjylland
- Spartak Moscow vs Benfica
- Cluj vs BSC Young Boys
- Red Star Belgrade vs Sherriff Tiraspol
- Dinamo Zagreb vs Legia Warsaw
- Ferencvaros vs Slavia Prague
- Olympiakos vs Ludogorets
First legs of August 3/4 with second legs on August 10
FC Midtjylland will travel to face PSV in the Champions League third qualifying round, with the first leg taking place on either August 3 or 4. The second leg takes place on August 10.
Celtic drop into the third qualifying round of the Europa League, where they will face FK Jablonec of the Czech Republic.
Meanwhile, Celtic start their Scottish Premiership campaign this Saturday when they visit Hearts, live on Sky Sports Football. Coverage starts at 7.30pm with kick-off at 8pm.