Top seed de Minaur cut a frustrated figure again on Friday, having surely seen this as his best ever opportunity to win the tournament that's considered second only to Wimbledon in terms of grass-court prestige.
But the world No.6 caught Nakashima on one of his hot days in the London sunshine as the crisp-hitting Californian prevailed 7-5 6-3 in the quarter-final of the historic championships on Andy Murray Arena.
It meant de Minaur's dream of advancing one place to join the world's top-five players for the first time was also sunk.
If he had prevailed, de Minaur would have leapfrogged American Ben Shelton, who was simultaneously losing his quarter-final at the Halle tournament in Germany to Taylor Fritz, into the fifth spot.
No less than 18 Australian men, including all-time greats such as Lew Hoad, Ken Rosewall and Rod Laver, have won the prestigious Wimbledon warm-up event.
In its 123rd edition, de Minaur had been hoping to emulate the most recent of them, Lleyton Hewitt, who won the last of his four titles 20 years ago and was in the Sydneysider's player's box on Friday to urge on a player built in his never-say-die image.
But world No.32 Nakashima is a handful for anyone on a grass court, and neither player gave up a single break point in the opening set until the Californian pounced in the 12th game, forcing de Minaur to miss a hopeful lob to stay alive.
But the Australian appeared the better player in the second set, until he offered up a distracted service game at 3-4 and Nakashima broke with a scintillating forehand pass, one of his 20 striking winners.
Typically, de Minaur still fought tigerishly from 5-3, 30-0 down to earn a break point of his own, but Nakashima saved it with another huge serve down the T and went on to earn victory in just over an hour-and-a-half.
It meant de Minaur failed to match the performance of his English fiancee Katie Boulter, who'd reached the semi-finals of the equivalent women's tournament at Queen's the week earlier. She turned out to cheer him on, but to no avail.
The Australian challenge then quickly ended when qualifier Rinky Hijikata was outplayed 6-1 6-2 by impressive left-hander Ugo Humbert in his quarter-final, with the Frenchman through to face former winner Tommy Paul, 6-3 7-6 (7-4) victor over Alejandro Davidovich Fokina, in Saturday's semis.
Francisco Cerundolo ended the stirring and unexpected run of London hope Arthur Fery 7-6 (7-1) 3-6 6-4 to set up his semi-final with Nakashima.
Meanwhile, Frenchman Corentin Moutet was fined almost all of his prize money following his foul-mouthed post-match interview when he said the 'F-word' seven times live on BBC TV after his first-round victory over Giovanni Mpetshi Perricard.
The ATP announced that Moutet, who earned Stg 33,000 ($A62,000) for reaching the second round of the HSBC Championships, has been fined a whopping $US40,000 ($A57,000). That equates to more than 90 per cent of his prize money, or over $A8000 per swear word.
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