Italy's victory gives their surprise 100-metre individual champion Lamont Marcell Jacobs his second gold of the Games.
Italy produced a stunning performance to win the men's 4x100 metres relay Olympic title for the first time in their history on Friday with a national record of 37.50 seconds.
Britain's men made up for a poor series of performances in the individual sprints by taking silver in 37.51sec while Canada won bronze in 37.70sec.
Italy's victory gave their surprise 100m individual champion Lamont Marcell Jacobs his second gold of the Games.
The British looked like they would take an unlikely gold as they led by a metre at the final changeover.
However, the unheralded Filippo Tortu reeled in Nethaneel Mitchell-Blake and sealed gold with the dip on the line.
Behind them, Andre De Grasse ran a stunning anchor leg to overhaul both Jamaica and China to add relay bronze to his 200m gold medal and 100m bronze.
Tortu looked as stunned as anyone at the finish and put his hands to his head as he nimbly dodged some obstacles in his way.
A sizeable group of Italian team members seated in the stands roared out in delight and serenaded the triumphant quartet with some Italian songs.
Tortu mounted the electronic scoring board and stood proudly on top of it, as the Italians lapped up their compatriots' singing.