A Maren Mjelde penalty in the 59th minute and a strike from Fran Kirby five minutes later gave the Londoners a fighting chance of making the quarter-finals.
However, they were indebted to their German goalkeeper Ann-Katrin Berger who kept out penalties from Deyna Castellanos in the 15th minute and Merel van Dongen, 10 minutes from time. Atletico's first penalty had been awarded after Rasheedat Ajibade was brought down by Sophie Ingle. The Chelsea star was red-carded for her troubles.
Manchester City took a decisive lead in their tie against Fiorentina with a dominant 3-0 victory. Lauren Hemp and Ellen White scored inside the opening four minutes with substitute Sam Mewis heading home a third in the closing minutes. City are now on a nine-match winning streak in all competitions.
Jenni Hermoso's hat-trick - her first in the competition since August 2011 -- ensured a useful advantage for 2019 runners-up Barcelona against 2003 finalists Fortuna Hjorring in a 4-0 win. Captain Alexia Putellas added the fourth goal for Barcelona with eight minutes remaining.
Defending five-time champions Lyon play the first leg of their last-16 tie on Thursday at home to Brondby of Denmark.
Standout matches today