South Korea are through to the last 16 of the World Cup despite Yakubu’s second-half equaliser for Nigeria.
Kalu Uche gave Nigeria an early lead, but South Korea turned the game on its head with goals from Lee Jung-Soo and Park Chu-Young.
Yakubu then struck from the spot, but the Super Eagles could not find a third goal to put them in the knockout stage alongside Argentina.
Nigeria coach Lars Lagerback again overlooked Obafemi Martins, opting for veteran frontman Nwaknwo Kanu up front alongside Yakubu.
A poor pass from Rabiu Afolabi almost gifted South Korea a dream start after just three minutes, but Lee Chung-Young failed to hit the target.
And the Super Eagles suddenly got in front when Chidi Odiah raced down the right and Uche got ahead of Cha Du-Ri to meet the cross and divert the ball home.
Uche failed to bag his second with a curling free-kick and Chinedu Ogbuke Obasi then powered a drive wide after good work by Yakubu.
South Korea began to recover from their 12th minute setback and Chu-Young shot straight at Vincent Enyeama, and the Nigerian goalkeeper had to be alert to punch away Ki Sung-Yong’s free-kick as Chu-Young threatened to get on the end of it.
The upright then denied Nigeria a second through Kanu, and South Korea were back on level terms a couple of minutes later when Jung-Soo poked home Sung-Young’s threatening free-kick.
And if that was bad enough for the Nigerians, it got worse three minutes after the restart when Chu-Young bent his free-kick around the wall and past Enyeama to put South Korea ahead.
South Korea now had one foot in the last 16 with the Africans needing two more goals to take the spot from them.
But was the Asian side looking more likely to add to the scoring, Chu-Young fizzing a long-range free-kick agonisingly wide.
Nigeria began to get themselves back into the game and should have levelled on 66 minutes, but Yakubu was guilty of an incredible miss.
Uche fed Yusuf Ayila and his cross was missed by Jung Sung-Ryong, leaving Yakubu with an open goal, but the Everton striker somehow failed to find the net.
Yakubu was given the chance to make amends three minutes later and this time he took his chance, slotting home his penalty after Kim Nam-Il tripped Obasi in the area.
Danny Shittu then almost undid his side’s hard work but was thankful to see his sliced clearance go wide of his own goal.
Park Ji-Sung and Chung-Yong both went close for the Koreans before Martins almost snatched the goal that would have sent Nigeria through.
Obasi found Martins in space but his chipped effort went the wrong side of the post, and Victor Obinna then turned and fired into the side-netting as time ran out on Nigeria.
South Korea will now face Uruguay in the last 16.
Nigeria: Enyeama, Yobo (Echiejile 46), Kanu, (Martins 57) Afolabi, Shittu, Yakubu (Obinna 70), Uche, Ayila, Odiah, Obasi, Etuhu.
Goals: Uche 12, Yakubu pen 69
South Korea: Sung-Ryong, Yong-Hyung, Ji-Sung, Jung-Woo, Chu-Young (Dong-Jin 90), Young-Pyo, Jung-Soo, Sung-Yueng (Jae-Sung 87), Chung-Yong, Ki-Hun (Nam-Il 64), Du-Ri.
Goals: Jung-Soo 38, Chu-Young 49
Bookings: Enyeama, Ayila, Obasi (Nigeria), Nam-Il (South Korea)