Needing to beat the Portuguese champions to be sure of their place in the last 16, Sir Alex Ferguson's side again failed to win on their travels in Europe and other results on the night meant United also finished bottom of Group D and missed out on a place in the UEFA Cup in the process.
In truth it was a disappointing performance by the two-time European champions who took the lead in the sixth minute through Paul Scholes.
In the only movement of note they created all night, Ryan Giggs played in Gary Neville down the right and his low cross was bundled home at the second attempt by Scholes on the line.
But that moment proved to be as good as it got for United at the Estadio da Luz as Benfica were soon level through Geovanni.
John O'Shea was deceived down the left by Nelson and Geovanni reacted first to his driven cross to plant a diving header past the flat-footed Edwin Van der Sar in the 16th minute.
Scholes almost volleyed United into a 30th minute lead with a dipping effort from 25 yards, but the away side continued to give the ball away in midfield and they were punished four minutes later.
Midfielder Beto - once a transfer target for the Red Devils - tried his luck with a first-time effort from the left edge of the penalty area and his low shot took a deflection off Scholes before squeezing inside Van der Sar's left-hand post.
United started the second half with increased urgency and should have drawn level on the hour mark but Cristiano Ronaldo dragged his low shot wide of the post after a neat three-man move.
With a shock European exit on the cards, Ferguson threw on Louis Saha and Ji-Sung Park but it was Benfica who always looked the more likely goalscorers.
Wayne Rooney had a couple of half chances blocked by the impressive Luisao before Joao Pereira should have finished it off in the 75th minute but the substitute's quick break ended with the ball slamming into the side-netting.
Geovanni too could have wrapped up the game soon after but drilled straight at Van der Sar and despite all United's pressure in the final 10 minutes, goalkeeper Quim was never really troubled.
The result leaves United's season all but over before Christmas and serious questions now beginning to be asked of Sir Alex Ferguson.