Peter Taylor's youngsters, already guaranteed a play-off to reach the finals next summer, controlled much of the play but the Austria captain, Gyorgy Garics, had already hit the bar with a header before Marc Janko's close-range double in the second period ensured England's first defeat of their qualifying campaign.
Carlton Cole opened the scoring in the 18th minute when he thumped in a header from a cross to the edge of the six-yard box by the Aston Villa midfielder James Milner. But, in the 57th minute, the visitors levelled against the run of play, Zlatko Junuzovic's low cross findingthe unmarked Janko inside the area. Janko then hit the winner with 14 minutes left, finishing coolly after Garics' fearsome shot had been parried by Scott Carson.
England Under-21: Carson (Liverpool); S Taylor (Newcastle), Baines (Wigan), Dawson (Tottenham), Ferdinand (West Ham), Huddlestone (Tottenham), Milner (Aston Villa), Soares (Crystal Palace), Cole (Chelsea), Thomas (Charlton), Lennon (Tottenham). Substitutes: Onuoha (Man City), Camp (Derby), R Taylor (Wigan), Whittingham (Derby), Welsh (Liverpool), Jerome (Cardiff), Moore (Aston Villa).
Austria Under-21: Ozcan; Sonnleitner, Mimm, Berger, Pollhuber, Metz, Idrizaj, Garics, Junuzovic, Holzl, Janko. Substitutes: Olevink, Sentar, Weisenberger, Wolf, Ulmer, Thonhofer, Mossner.
Referee: J Van Der Velde (Bel).