Madeline Perry produced a brave display before losing in four games against six-times champion Nicol David at the World Open in the Cayman Islands.
After losing the opening two games 11-3 11-7, 10th seed Perry snatched the third game 11-9 but David sealed her win by taking the fourth game 11-3.
"I know that Madeline can come back from two-love down and I had to do something about it," said David.
"I had to adjust my shots in the fourth and I'm pleased with that."
Northern Ireland woman Perry, 35, engineered a brief but passionate recovery during which she once hurled her racket away in frustration, a misdemeanour bringing mild admonishment from the referee.
Perry beat world number one David back in 2009 en route to the final of the British Open in Manchester.
Malaysian David's win sets up a semi-final meeting with Jenny Duncalf which is a repeat of last year's final.
Duncalf upset the seedings by beating her English compatriot Alison Waters 7-11 17-19 11-5 11-4 11-9 in a thrilling quarter-final contest.
The other semi-final will be between David's two closest rivals, Laura Massaro of England who beat her twice last year, and Raneem El Weleily of Egypt.