The Americans won the first set 21-19, then dropped two straight sets, 21-18, 15-11.
The other American men's team, Beijing gold medallists Todd Rogers and Phil Dalhausser, had already been eliminated.
Latvia will meet the reigning world champion Brazilian team of Emanuel and Alison, which escaped a set point in the third to beat Poland 21-17, 16-21, 17-15.
The reigning world champions trailed Mariusz Prudel and Grzegorz Fijalek 14-13 in the third. The Brazilians had one match point of their own before Alison spiked it to the sand, then ran off the court celebrating before returning to give his partner a bear hug and a kiss on the cheek.
The No. 2 Brazilian team of Ricardo and Pedro Cunha lost to Germany later Monday. Ricardo is the only three-time medallist in Olympic beach volleyball history, winning silver in Sydney, gold in Athens and bronze in Beijing — the latter two with Emanuel as his partner.
In the remaining quarterfinal, Reinder Nummerdor and Rich Schuil of the Netherlands were scheduled to meet Italy's Paolo Nicolai and Daniele Lupo.
The United States is already guaranteed a medal in the women's tournament, with two-time gold medallists Kerri Walsh Jennings and Misty May-Treanor into the semifinals along with April Ross and Jennifer Kessy.