A potential podium finish was on the cards for the McLaren driver as he came in for his third and final pit stop 12 laps from the finish.
But within yards of leaving his pit box, Button was forced to pull over as the right-front wheel had worked loose.
The mechanic working on the change of that tyre lost the wheelnut, and in picking up the spare wheel-gun, triggered the front-jack man into lowering the car, which in turn led to the lollipop man allowing Button to leave.
It was a simple case of human error, but one that remarkably leaves Button with the unenviable record of never having finished on the podium in 12 attempts at his home race.
"We all make mistakes, and you always hope they won't happen, but this is even more disappointing as it's in front of my home crowd," said Button.
"When you're that high up and your pace is good, there's always the chance of a podium, so what happened is a pity because it could have been a great race. I'm just sorry we couldn't do better because a podium finish was on the cards."
The race was won by Ferrari's Fernando Alonso ahead of championship leader Sebastian Vettel and his Red Bull team-mate Mark Webber.
Button's team-mate Lewis Hamilton also suffered from pitlane pitfalls.
The Englishman climbed from 10th to fifth inside three laps courtesy of a number of fine moves, and was within a second of the lead later in the race.
However, in a car struggling for pace in fuel-saving mode, he dropped to fourth, holding off Ferrari's Felipe Massa in a thrilling last-lap duel.
Hamilton, who along with Button is now 95 points adrift of Vettel, said: "The fans were phenomenal."