The 20-time major champion Djokovic, whose Golden Grand Slam hopes were dashed by Alexander Zverev on Friday, lost 6-4, 6-7 (6/8), 6-3 as Spain's Carreno Busta won on his sixth match point
Novak Djokovic hurled his racquet into the empty stands and smashed another on a net post as he lost his cool on his way to defeat against Pablo Carreno Busta in the Olympics bronze medal match on Saturday.
The 20-time major champion, whose Golden Grand Slam hopes were dashed by Alexander Zverev on Friday, lost 6-4, 6-7 (6/8), 6-3 as Spain's Carreno Busta won on his sixth match point.
It is the first time top seed Djokovic has lost two straight singles matches since defeats by Dominic Thiem and Roger Federer at the 2019 ATP Tour Finals.
The match was a gripping encounter played over two hours and 47 minutes in the suffocating Tokyo heat, with both men desperate to secure a medal.
Djokovic, who will bid to win the final leg of the calendar Grand Slam at the US Open, which starts next month, saved a match point in the second set tie-break to force a decider and then four more late in the third set.
But Spaniard Carreno Busta, who also knocked out second seed Daniil Medvedev earlier in the tournament, struck 32 winners in an excellent performance, with Djokovic managing just 18.
The 30-year-old finally wrapped up victory in a lengthy final game when his illustrious opponent put a forehand into the net.
Djokovic brought back memories of his infamous default against Carreno Busta last year at the US Open, when he inadvertently struck a ball at a line judge.
He thew his racquet high into the empty stands as he saw a break point come and go in the opening game of the third set and continued to cut an angry figure, destroying another racquet after a miss at the net.
Djokovic will have a second chance to add to his 2008 Olympic singles bronze later on Saturday, when he and Nina Stojanovic take on Australians Ashleigh Barty and John Peers in the mixed doubles third-place play-off.