Younger sibling Oliver Hynd won the Paralympic bragging rights in the battle of the brothers as he pipped Sam to silver in the pool.
The crowd roared the pair on from start to finish in the aquatics centre yesterday, but it was not enough to power them to victory in the S8 400 metre freestyle event, which was won by Chinese swimmer Wang Yinan in four minutes 27.11 seconds.
Oliver was second in four minutes 27.88 seconds - a personal best - with Sam third in 4:32.93.
Fellow Brit Thomas Young finished just outside the medal positions in fourth place.
The brothers have neuromuscular myopathy, a condition that severely weakens their legs, and went into the race as favourites.
Despite his disappointment of missing out on gold, Sam, 21, remained upbeat, saying: "The Chinese guy beat us both but there's always next time.
"I could tell the crowd enjoyed it and I know I did so I am happy."
Beijing gold medal winner Sam and Oliver, 17, took up swimming at an early age and are said by their mother to have grown ever-more competitive.
Both siblings, originally from Sutton-in-Ashfield, Nottinghamshire, spent years rising at dawn in a bid to land gold at this year's Games.
Sam made his his Paralympic debut aged 17 when he struck gold in Beijing, the same age as his brother's debut at the London Games.
Oliver still trains with the Nottinghamshire-based Nova Centurion swimming club, while Sam, 21, moved to the Swansea Performance Centre in 2009.
Sam and Oliver took gold and silver respectively in the 400m freestyle at last year's Paralympic European Championships in Berlin, watched by their mother Helen.
Ms Hynd was chosen by the International Paralympic Committee to be a torch-bearer for the London 2012 Paralympic flame relay.
Speaking about the honour in June, the 49-year-old, from Kirkby-in-Ashfield, Notts, said: "It's such an honour to be involved and be part of something so special. Seeing both of them compete in London will fill me with enormous pride because they will be going head to head and, I know in my heart, it's most likely for gold.
"It's going to be very emotional for me and my husband. Naturally I wish both could win gold in the same race as they are equally talented."Reuse content