With two outs in the bottom of the eighth and runners on first and second, UNC coach Mike Fox brought in Andrew Miller, who got pinch hitter Ryan Gipson to ground to UNC second baseman Bryan Steed.
The ball was sharply hit, but Steed handled it cleanly. However, his throw was wide and got past first baseman Tim Federowicz, enabling Bill Rowe to score and the Beavers to claim their first College World Series championship.
"I just got rid of the ball too quick and the ball went up the line," a dejected Steed said. "I just didn't make the play."
The Tar Heels' fourth error of the game set a CWS Championship single-game record.
Rowe got on via a two-out walk and then Tyler Graham reached base on a blooper to left field, chasing Carolina starter Daniel Bard, who scattered six hits over 7.2 innings and allowed just one earned run.
Still, the Tar Heels didn't go quietly in the ninth, as two runners reached base with just one out. But the Beavers' top reliever, Kevin Gunderson, who had thrown 5.1 innings on Saturday, got Josh Horton to hit into a fielder's choice and then Chad Flack to fly out.
Along with the fielding miscues, UNC failed to convert offensive opportunities as well, including a bases loaded, one-out situation in the top of the eighth that failed to yield a score.
Mike Cavasinni went 3-for-4, including a two-out RBI single in the fifth that scored Seth Williams and tied the score at two apiece.
But OSU starter Jonah Nickerson withstood further damage, and finished with seven strikeouts in 7.2 innings.
"This is a huge disappointment for us," Fox said. "To get this close and not win it certainly is disappointing."
Dallas Buck (13-3) was the winning pitcher and Bard (9-4) was saddled with the loss. Meanwhile, Gunderson picked up his NCAA-best 20th save on the season.
OSU (50-16) went 6-0 in elimination games during the postseason and was the first team in history to lose two games in Omaha and win the title.
The loss capped the Tar Heels' (54-14) best season in school history.