Spain thumped Iceland 6-1 on Tuesday to book their place at next summer's World Cup in Brazil ahead of England, who must now come through the playoffs.
Vicky López scored twice, with Edna Imade, Salma Paralluelo, Clàudia Pina and Aitana Bonmatí also on target as the world champions secured the three points needed to punch their ticket to the finals.
England, meanwhile, beat Ukraine 3-0 but missed out on top spot in the group despite finishing level on points with Spain due to the head-to-head record between the two teams.
The Lionesses had beaten Spain 1-0 when the teams met at Wembley in April but La Roja's 4-0 win last Friday ensured they would prevail in the event the teams finished level on points.
Sarina Wiegman's side, who beat Spain in last year's European Championships final, now need to navigate the playoffs later this year if they are to qualify for the World Cup.
After finishing second in Group A1, they will be seeded in the draw for the playoffs, but will have to come through two home-and-away knockout matches which will be held during the international windows in October and November-December.
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Elsewhere on Tuesday, France and Denmark also sealed their place in Brazil, joining Germany and Spain as the four group winners to progress directly to the finals as UEFA representatives.
France edged out Ireland in Group A2, who like England will drop into the playoffs, along with the Netherlands, whose slim chances of qualifying directly for the World Cup hinged on France and Ireland drawing.
Denmark beat Serbia 4-1 to top Group A1, with their nearest rivals Italy and Sweden playing out a draw between themselves.
Germany had already wrapped up Group A4 last week when they beat second-placed Norway.
Along with the four European sides, hosts Brazil have already qualified, along with fellow South American teams Argentina and Colombia.
Australia, China, Japan, North Korea, the Philippines, South Korea and New Zealand are the other countries who have already booked their place at the finals.