"I’ve never seen a guy come back from eight metres on the 100 metre mark, to overtake me on the finish line," said Pistorius, reeling from shock after conceding his huge lead to finish second.
Pistorius set a T43 world record of 21.30 seconds in the heats on Saturday and was expected to win the gold medal for the third time in succession after his victories in Athens and Beijing in the previous Games.
In the final, however, he clocked 21.52 to lose his title to Alan Oliveira of Brazil, who won the race in 21.45 seconds.
In third place was Blake Leeper from the US, in 22.46.
Pistorius dismissed suggestions that he had faded on the line thinking the race was already won.
"I never believe you have it in the bag until you cross the line, and I always believe in running over the line which I did.
"I ran a great race tonight -- it really was a top race from me."
The packed stadium fell silent when only moments earlier spectators had been cheering at the top of their voices when Pistorius came round the bend, and was well ahead on the straight.
It was not to be as Oliveira came out of nowhere to take Pistorius on the finishing line.
Pistorius, who had earlier expressed his outrage at the longer prosthetics being used by both Oliveira and Leeper, said there was nothing he could do as they were permitted by the International Paralympic Committee (IPC).
"Obviously I am upset, I’ve never lost a 200m race in my life," he said.
"There has never been another Paralympian amputee to run a 21 second race before, never mind a 21.4.
"We’ve known about [these longer prosthetics} for about a month now, since the US trials, and I’ve brought it up with the IPC but nothing has been done about it -- I believe in the fairness of sport and I believe in running on the right length.
"We’ve got a formula which is pretty much the same for everyone -- from your hip to your condyle and from your condyle to your toes, and the ratio is about 1.6 and I’ve stuck with it for years."
Arnu Fourie, a single leg amputee, competed in the same final and set a new T44 world record of 22.49, just missing out on the medals.
He was delighted with his own performance but said he sympathised with Pistorius.
"I came fourth so I don’t want to get involved as it sounds like sour grapes, but you can see the guys look out of proportion.
"They weren’t that height at last year’s world champs so it is something very recent but there is nothing we can do if it is in the rules.
"If Oscar wants to continue running in able-bodied events like the Olympics, he has to stick to the prosthetics that have been approved or it will open up more controversy," said Fourie.