The Red Devils went into the Group F fixture with the Checkered Ones aware that a draw would only be enough if Morocco lost to Canada.
However, the Atlas Lions quickly established a two-goal lead in their fixture, forcing Belgium to push for the victory at the Ahmad bin Ali Stadium.
Belgium had their opportunities, many of them spurned by Romelu Lukaku during the closing half hour, leaving Croatia to progress into the last 16 as runners-up to Morocco who held on to prevail in Doha.
Within 10 seconds of kickoff, Croatia almost stunned Belgium by taking an early lead, Ivan Perisic firing a shot wide of the far post having gotten the better of Leander Dendoncker.
The early wake-up call arguably benefitted Belgium with Yannick Carrasco forcing a save out of Dominik Livakovic soon after Roberto Martinez's team would have learned that Morocco had established an advantage in the other fixture.
Belgium then stormed clear through Kevin De Bruyne who played what appeared to be the perfect through-ball to Dries Mertens, but the veteran forward could only send his effort high over the crossbar.
Croatia thought they had won a penalty moments later when Carrasco made contact with Andrej Kramaric, only for Belgium to be handed a reprieve for offside after VAR bizarrely requested that the referee make the decision at the monitor rather than relying on the technology.
The incident sapped the early energy out of the game, something which suited Croatia as Morocco went 2-0 up versus Canada, and they remained largely in the ascendancy without creating anything of note.
In the fourth minute of added-on time, Josip Juranovic sent a shot off target from the edge of the area, further highlighting that Belgium needed some kind of change at the break.
That switch was the introduction of Lukaku, who soon showed his presence with a header at the back post, but Croatia responded with a period of incessant pressure at the other end.
Both Marcelo Brozovic and Modric let fly with well-driven attempts from around 18 yards, with Courtois having to be alert to parry each effort away from goal.
Nevertheless, it was Belgium who should have gone ahead. After Carrasco was denied by a last-ditch block, the ball ricocheted into the path of Lukaku who struck the inside of the post from eight yards.
Lukaku also failed to hit the target with a header from close range, albeit after the ball had already gone out of play, but the nation's record goalscorer was looking devoid of confidence in the final third.
Although both teams had their moments, clear-cut chances were few and far between until Lukaku squandered another opening with four minutes left, the substitute flicking a sharp chance wide of the post from close range.
An even better opening went begging shortly afterwards, Thorgan Hazard's perfectly-floated cross finding Lukaku at the back post, only for the Inter Milan frontman failing to anticipate the ball reaching him and it instead bouncing off him into the grateful hands of Livakovic.
In added-on time, a tremendous intervention from Josko Gvardiol prevented Lukaku from scoring from three yards out, and that proved to be the final opening as Croatia booked their place in the knockout stages.