Sitting second in the Premier League, United was expected to ease past the Spanish team and into the quarterfinals of Europe's elite club competition.
But two quickfire goals from Wissam Ben Yedder in the second half secured Sevilla a famous 2-1 win at Old Trafford.
Even though United are England's most successful team -- in major trophies won -- and own a trio of Champions League titles, manager Jose Mourinho baffled reporters by attempting to play down the defeat while talking up his own past achievements.
"I sat in this chair twice in the Champions League after knocking out Manchester United [in the last 16] at home, at Old Trafford. In this chair with Porto (in 2004) and Real Madrid (in 2013), they are out both times. It is not something new for the club. I don't think the performance was bad," the Portuguese told a post-match press conference.
Unsurprisingly, Mourinho's comments drew criticism that mostly focused on his tactical approach to the game.
Despite needing a win to advance -- aside from a penalty shootout -- Mourinho started two holding midfielders in Nemanja Matic and Marouane Fellaini.
Trio on bench
Attacking threats Paul Pogba -- formerly the world's most expensive player -- Juan Mata and Anthony Martial all began on the bench before coming on in the second half.
United mustered just four shots on target, only stepping up the urgency after French substitute Ben Yedder scored in the 74th and 78th minutes.
While Sevilla has cleaned up in the Europa League -- winning five titles -- this is only the second time it has reached the quarterfinals of Europe's top club competition.
Currently fifth in Spain's top division, Sevilla lags 27 points behind leader Barcelona.
Rio Ferdinand -- a Champions League winner with United in 2008 -- and former England striker Gary Lineker were left puzzled by Mourinho's team selection.
Ferdinand had sympathy for Lukaku, who pulled a goal back in the 84th minute. He said United looked like a team full of "strangers."
Another former Champions League winner with United, Paul Scholes, added on BT Sport: "They approach every game conservatively. Some they get away with, because they get a win.
"Tonight they had nothing. No energy, no fast start. The performance was very bad."
Scholes singled out forward Alexis Sanchez, who has so far underwhelmed since joining from Arsenal during the January transfer window.
Sanchez more or less benefited from a free role in London, which isn't the case at United.
"He gave the ball away so often and his manager has to see that in the 10 games he has played, he has not been good," said the ever blunt Scholes.
Other observers seemed to agree.
The Guardian's Barney Ronay labeled United "limp"
and said the players weren't being allowed to perform at their best given Mourinho's defensive approach.
'Source of embarrassment'
"All tactical preferences aside, it is hard not to conclude that this United team are better than that, they have more invention, more drive, more joy in their football than they were allowed to show over 180 guileless minutes," he wrote.
"It should be a source of embarrassment that they looked so labored, cocooned within the manager's enduring defensive rage against the fifth best team in Spain."
Meanwhile Sam Wallace, writing in the Telegraph
, added: "You could make a case for defending against the free-scoring Liverpool on Saturday but there was no justification to play with the handbrake on against a spirited but mediocre Sevilla side who United could have overwhelmed if only they knew how."
But Ferdinand and Scholes weren't solely focusing on Mourinho, saying the players needed to take the blame too.
"The players have let him down tonight by being so mediocre against a poor team," said Scholes. "You are going for a place in the Champions League quarterfinals and there was no desire, heavy legs."
Five English teams began in the round of 16 but now it appears as if only runaway Premier League leader Manchester City and Liverpool -- both already through -- will be in Friday's quarterfinal draw.
Tottenham exited to wily Champions League veterans Juventus -- although Spurs, unlike United, went out with a bang -- while struggling Chelsea visits Lionel Messi's Barcelona on Wednesday after the first leg ended 1-1 in London.