Gareth Southgate's men had failed to take three points home from their previous meetings with Hungary, Italy and Germany to languish at the bottom of the rankings in League A Group 3.
England stepped out in front of a full Molineux crowd after being forced to play their home game with Italy largely behind closed doors, but it was a disastrous affair for those in white.
Roland Sallai netted a brace alongside efforts from Zsolt Nagy and Daniel Gazdag in a humiliating evening for England, who also saw John Stones sent off and matched or broke a number of unwanted feats on the night.
The 4-0 loss marked the Three Lions's worst home defeat in any competition since March 1928, when they went down 5-1 to Scotland, and they had never lost a home game by at least four goals without scoring before.
Only against Yugoslavia away from home in 1958 had England suffered a defeat by a margin of four goals or more without scoring, and they have also gone four games without victory for the first time since 2014.
Boos rang around Molineux from the home end during and after the game, with Southgate in particular targeted with hostile chants by Three Lions fans, and he accepted the blame for the embarrassing defeat.
"We picked a young team with energy and when the game started to go against them it started to look that way, that is my responsibility in the end," Southgate told Channel 4.
"At half-time we needed to go for the game and made changes with more of an attacking impetus. It left us more open when we were pushing and it left us wide open. Across the four matches, that is my responsibility.
"I tried to balance looking at new players, resting players we could not keep flogging but in the end the teams have not been strong enough in the two Hungary games, the other two results were positive but tonight is a chastening experience."
Captain Harry Kane also admitted that the evening was one to forget, but he urged fans to look at the bigger picture after Southgate's previous endeavours at the World Cup and European Championships.
"A disappointing night. First half we created enough chances to score but it has been the story of our Nations League, we have not quite had the cutting edge," the England captain added.
"Second half was not acceptable after going 2-0 down. It is not the time to panic, we have to get our heads up and come back stronger in September.
"It is our first big defeat in a long time, the defence has been the structure of our success. A night to forget but we have to take it on the chin and move forward, we have to prepare for a big World Cup and will learn a lot from this camp.
"Let's not forget where we have come from, our first final in 60 years, a semi-final in the World Cup compared to where we have been in the last 50 years. I understand the fans' frustration, we will keep working to try and have a successful World Cup."
England are now officially out of the running for the Nations League finals and find themselves three points behind third-placed Italy as they seek to avoid demotion to League B.
Southgate's side return with a trip to San Siro to face the Azzurri on September 23 before closing their Nations League campaign against Germany at Wembley three days later.