Carlos Tevez, on as a late substitute, missed the crucial spotkick as the hosts crashed out to extend a trophy drought going back to 1993. [break]
Diego Perez had given Uruguay a fifth-minute lead but Gonzalo Higuain levelled 12 minutes later.
Both sides ended the 90 minutes with ten men. Perez was sent off on 38 minutes for a second yellow card and then Argentina lost skipper Javier Mascherano in the 86th minute for a bad tackle from behind on Luis Suarez.
The extra half hour failed to end the stalemate and Martin Caceres drove home the winning spotkick as Uruguay moved into a semi-final against Peru, conquerors of Colombia.
Early header secures 1-0 win for Argentina against Uruguay