STORY: "Honestly, I feel sad, I'm sad. But like, the players didn't give up until the last penalty," said Japan fan Yuki Watanabe after the match.
"It was a great game, Japan was very tough but we made it through at the end of the day and we're going to the quarter-finals," said Croatia fan Ante Mateo.
Goalkeeper Dominik Livakovic saved three spot-kicks ushering his team to the next round for the third time after an enthralling 120-minute contest finished deadlocked at 1-1 on Monday.
Daizen Maeda opened the scoring for Japan in the 43rd minute and Ivan Perisic headed the equalizer 10 minutes after the break but the teams could not be separated over the remainder of the game.
For Japan, this was last-16 heartache for the fourth time after a loss to Turkey in 2002, exiting on penalties against Paraguay in 2010 and giving up a 2-0 lead to lose to a stoppage-time goal against Belgium four years ago.
After all their hard work in topping a difficult group and matching the Croatians for 120 minutes, Japan crumbled in the shootout with only Takuma Asano converting his penalty.
Croatia will face Brazil in the quarter-finals.