Sri Lanka reached the 230-run victory target in 39.3 overs with Tillakaratne Dilshan and Upul Tharanga hitting unbeaten centuries as England bowlers failed to make any breakthrough to dent the hosts run chase.
Dilshan's tenth ODI century, that came off 107 balls, was studded with 2 sixes and 9 fours.
Tharanga hit a six and 12 fours in his 11th ODI century that came off 122 balls.
Earlier, Jonathon Trott and Eoin Morgan hit contrasting half-centuries to help England reach a respectable 229/6.
The 29-year-old Trott finished with 86 and put on 91 for the fourth wicket with Morgan (50) after England, electing to bat in the day-night game, were reduced to 31/2 on a slow, flat pitch at R. Premadasa stadium.
Patience was the key word for Trott as he negotiated the four-pronged Sri Lankan spin attack but failed to lift the innings in the final overs as England managed just 23 in the batting power-play.
Trott fell in the 49th over, caught off spinner Muttiah Muralitharan who finished with 2/54 in what could be his last international match before retirement.
He hit only two boundaries off the 115 balls he faced as Sri Lanka's bowlers kept a tight line and length in the final 10 overs.
Trott had added 64 for the third wicket with Ravi Bopara (31) after England lost captain Andrew Strauss (five) and make-shift opener Ian Bell (25) by the ninth over.
He brought up his fourth half-century in the tournament with a reverse sweep off Tillakaratne Dilshan in the 33rd over.
Morgan, dropped at 16 off Ajantha Mendis, got two more lives when Angelo Mathews and Rangana Herath dropped him in the space of three balls in one Muralitharan over.
The 24-year-old left-hander completed his 11th half-century with a sharp single off Lasith Malinga but in the same over he miscued a lofted drive and was caught in the covers by Mathews.
Morgan hit four boundaries during his 55-ball knock.
