Blues were just edged out of the second automatic qualifying place in Group G as Fulham defeated Reading this afternoonbcfc.com
Captain Geraldo Bajarmi broke the deadlock in the 79th minute with a powerful header from a corner.
And five minutes later Odin Bailey despatched a penalty after Josh Andrews was hauled down in the box.
A freak own goal by Caolan Boyd-Munce in added-time gave Colchester a glimmer of hope. But it was not to be for the Us at Liberty Way, home of Nuneaton Town.
Blues did what they had to do in this final Group G fixture but unfortunately table-toppers Reading couldn't do them a favour as Fulham won that contest, so clinching the second automatic qualifying spot for the knockout stage ahead of Richard Beale's side.
Blues got the first sighter on goal when Corey O'Keeffe played a ball in from the left to the feet of Olly McCoy, who was partnering Bailey up front.
McCoy shifted the ball out neatly and got a shot away, unfortunately oncoming defender Percy Kiangebeni got a decisive block in and it spun away for a corner.
In the 23rd minute Joe Redmond won a duel and stepped forward towards halfway and feeds McCoy, who had pulled away down the right.
McCoy sent in an excellent cross that was met by Bailey, but he couldn't quite divert his header under the crossbar.
Callum Jones shot just wide from the edge of the area for Colchester, who have as good as they got in a tight first-half.
Blues looked dangerous at set-pieces and from one, Bajrami got up at the far post and was unfortunate to have his header rebound off the back of a defender.
Two minutes to the break, Bajrami found O'Keeffe who had made a run from left to right inside, and he in turned moved the ball out to Bailey.
Bailey came on from the right and whacked a shot at goal with his left peg, but it was always rising as it moved through the air.
After the break Blues had to defend very well in the initial exchanges and Bajrami and the excellent Redmond were stout.
Jones managed to get away from Bajrami and made ground towards goal, but Redmond executed a sliding challenge in the area to deny him a big opportunity.
Then, in the 58th minute, Jones crossed towards Todd Miller in the heart of the Blues area and Ben Forrest came in with a vital, strong challenge to thwart him.
Blues kept plugging away on a difficult, bobbly pitch and began to carve out more and more good openings.
With O'Keeffe lively throughout and Andrews sent on as substitute to provide a different focal point for Blues, Colchester's resistance was eventually broken.
Ryan Stirk won possession and led a quick raid on the exposed visiting rearguard; he waited for Bailey to run round him before putting the ball into his path. Bailey fired at goal and his shot was saved, behind.
From the resulting O'Keeffe corner on the left, Bajrami came storming in to score with an emphatic header from eight yards.
Blues second goal came from another corner, this time on the opposite side, when Andrews was pulled over as players jostled for position as the cross came over.
Bailey took the spot-kick and slammed it to the left of goal, giving Callum Coulter little chance (84 minutes).
In the first minute of added-time Colchester replied when Bajarmi went to stop Miller's run into the box, cracked the ball away only for it to strike the back of Boyd-Munce and drift over Zach Jeacock in Blues goal.
Blues: Jeacock, Hutton, Forrest (McLean 78), Stirk, Bajrami, Redmond, Baker (Andrews 64), Boyd-Munce, McCoy, Bailey, O'Keeffe. Subs: Siviter, Dawes, Thompson-Sommers.