Argentina are ranked fourth in the FIBA rankings behind world champions Spain, the United States and Australia, but the South American side will not play in this year's World Cup despite finishing as runners-up in the last edition.
They were cruising with a 17-point lead and 12 minutes left in the game before the Dominicans roared back into the contest to win 79-75, silencing an 8,000-strong crowd in Mar del Plata.
In their group, Argentina finished behind Canada, the Dominican Republic and Venezuela, who will all travel to the August 25th-September 10th World Cup which will be co-hosted by the Philippines, Japan, and Indonesia.
The U.S., Puerto Rico, Mexico and Brazil qualified from the other group.
"It's going to hurt to watch (the World Cup) on TV. It's my responsibility," said Argentina's head coach Pablo Prigioni, who won an Olympic bronze medal for the country as a player in 2008.
"We didn't knock them out and doubt started creeping in. This is a tough hit. Emotionally, we couldn't get back up after they tied the game."
The team have no active NBA players on their roster but relied on former Denver Nuggets and Dallas Mavericks guard Facundo Campazzo as well as 40-year-old Carlos Delfino, who last played in the NBA in 2014.
"It sucks that we can't be in the World Cup, but the mentality now has to be to think about what's coming, work and move forward with this group," Campazzo told TyC Sports.
"I say thank you and sorry to the fans on behalf of the whole team. We left everything (on the court)."
Argentina were once the pre-eminent basketball power in the world when a side led by former San Antonio Spurs guard Manu Ginobili dethroned the United States in the semi-finals of the 2004 Olympics in Athens en route to the gold medal.
With no opportunity to qualify for the Paris Olympics with a strong finish at the World Cup, Argentina will now have to rely on qualifying through FIBA Olympic pre-qualifying tournaments.
