El Segundo will now face the all-star team from the Smithfield (Rhode Island) Little League at 4 p.m. Tuesday in the 20-team, modified double-elimination tournament.
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El Segundo tried to rally in the bottom of the sixth inning. Down 3-1, they put two runners on base but the Little Leaguers from Needville, Texas were able to come out with the win.
The team from Southern California opened the tournament by rallying to beat Ohio last week.
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El Segundo will need to win Tuesday, Wednesday and Thursday to reach the U.S. Championship game.
City News Service contributed to this report.