Jesse Joensuu was the Finnish hero, with two goals in the game including the winner with just 8 seconds remaining.
The Lions were level at the end of the second period, having gone ahead through HV71 forward Joensuu on 33.27, only to concede a Kyle Palmieri equaliser just 31 seconds later.
Bobby Ryan scored the second goal for the US on 41.39, before Mikko Koivu equalised for the Finns on 53:02 after the puck went in off his skate. A lengthy delay ensued while the referee consulted TV replays.
The US has a lacklustre record at the World Championships, having finished no higher than third since 1950. They did perform well in Helsinki, however, and following a 5-0 win over Finland in the group stage they had high hopes of advancing.
The Finns were criticised for poor showings against Canada and the USA last weekend, and their roster features just four NHL players. They were under strong pressure to perform ahead of the quarter final, even though no host nation has won the tournament since 1986.
The home team will now play Russia in the semi final. Russia overcame a spirited Norway—on Norway’s National Day—to run out 5-2 winners in Stockholm.
Slovakia beat Canada 4-3 to go through to the semi-finals, in which they will face either Sweden or the Czech Republic. The semi-finals will be played at the Helsinki Arena on Saturday, with the final and bronze medal match to follow on Sunday evening.
Latest in: News
Former PM: SDP like the Centre of the 70s
Former Centre Party chairman and Prime Minister during the early 90s, Esko Aho, says he sees parallels between the position of the Social Democratic Party today and that of Centre of the 1970s when his party faced the impact of economic change.
Two collisions in Pirkanmaa injure eight, five seriously
Two separate, but nearly identical head-on collisions in Pirkanmaa on Saturday injured eighth people, five of them seriously.
Fake cops steal from tourists
Three men, two posing as policemen, on Friday scammed a group of Brazilian tourists in Helsinki out of several thousand euros.
Pussy Riot members cancel appearances, whereabouts unknown
Weekend performances in Helsinki by two members of the Russian political performance group Pussy Riot, as well as scheduled interviews, were cancelled on Saturday. According to a web posting on the group's site late in the day, the two had no intention of performing in Helsinki. Organizers say otherwise.
STX Turku begins building TUI cruise liner
STX Turku had something to celebrate for a change, as the construction of a cruise liner for the German shipping company TUI kicked off at the shipyard.
Greens gather for party convention
This weekend, the Green League is holding its party convention in Helsinki and Espoo. Ville Niinistö will continue at the helm of the party.
More younger people, women and foreigners caught drink-driving
A new study shows an overall decline in driving under the influence -- and a change in the profile of those involved.
Pre Helsinki aims to uncover up-and-coming Finnish fashion designers
A new fashion event launched in the Finnish capital, Pre Helsinki, is aimed at raising the international profile of young home-grown designers.
Animal rights activists cleared of pig-farm video charges
Nearly all charges have been dropped against animal rights activists who secretly filmed cases of neglect at pork farms.
More Finnish kids opt to study English than native languages
English remains by far the most-studied foreign language in Finnish comprehensive schools.