Pursuing Ireland’s total of 157, England had Moeen Ali and Liam Livingstone at the crease and needed 53 runs from 33 balls to win when rain arrived at the Melbourne Cricket Ground.
At that point, the Duckworth-Lewis-Stern method, which calculates a team’s target score when rain stops a match, intervened to hand Ireland a five-run victory.
The result means England, one of the favorites to win the tournament, will likely have to defeat reigning champion Australia on Friday in order to reach the semifinals.
Andrew Balbirnie led the scoring for Ireland with a superb 62 from 47 balls, while Lorcan Tucker added 34 as England’s bowlers failed to gain an advantage in Wednesday’s match.
And when Josh Little removed Jos Buttler for a duck and Alex Hales for seven before Ben Stokes was clean bowled by Fionn Hand, England was suddenly left with a huge task to turn the contest around.
Dawid Malan battled to 35 off 37 and Ali was finding the boundary with ease in a quickfire 24 off 12 balls when the rain arrived, but it proved too little too late.
England, ranked 10 places above Ireland in the T20 rankings, will need to be far better in matches against Australia, New Zealand and Sri Lanka to progress in the tournament.
Ireland, meanwhile, is level on points with England and next faces Afghanistan in a winnable match that could keep the team’s hopes of reaching the semifinals alive.