They were beaten 3-2 by German's RB Leipzig.
Manchester United gave themselves too much to do last night.
Ole Gunnar Solskjaer's side, who just needed a draw to advance to the last 16 of the Champions League, were beaten 3-2 away to RB Leipzig in their final group game.
The German side went 3-0 up before United scored twice in the last 10 minutes through Bruno Fernandes and Paul Pogba.
However, the Red Devils came up short and now have Europa League football to look forward to in the New Year.
Manager Ole Gunnar Solskjaer says the buck stops with him.
Joining Leipzig in the last-16 will be Paris Saint-Germain. However, their game with Istanbul Basaksehir will need to be completed this evening.
Following accusations of racism levelled against the fourth official in Paris, both sets of players left the pitch.
UEFA have promised a full investigation, and a new officiating team will take charge of the game from the thirteenth minute at 5.55.
Elsewhere, Chelsea completed their successful Group E campaign with a 1-1 draw against Krasnodar at Stamford Bridge.
Cristiano Ronaldo scored two penalties as Juventus won 3-0 at Barcelona.
Both sides were already through.