Scotland 6 Argentina 9:Scotland blew a 6-0 half-time lead as Argentina extended their 19-year winning streak at Murrayfield and inflicted Andy Robinson's first defeat in charge.
The home side were on course to complete a clean sweep of autumn international victories for the first time since 2002 thanks to two Phil Godman penalties.
But Argentina turned the game on its head after the break, two penalties and a drop goal from Martin Rodriguez handing them their fourth straight win in Edinburgh.
Scotland wing Sean Lamont admitted his side had wasted the chance to beat Argentina.
Lamont said: "We just didn't come out firing in the second half.
"All the hard work was done and we just needed to close it out in the second half.
"They came out all guns blazing and we just didn't respond to that. We had a good opportunity but unfortunately we didn't finish that off today."
Robinson admitted Scotland had paid the price for not taking their chances.
He said: "We didn't take our chances and if you don't take your chances you are not going to beat anybody.
"They got themselves back in the game and they kept fighting and kept working for their squad.
"We got ourselves in a position to win and we didn't take it."