Spain, beaten 1-0 by Japan in their opening Group D match, could not respond to Jerry Bengston's first-half goal in Newcastle, and with no points from two matches cannot finish in either of the top two qualifying positions from their group.
Bengston stunned Spain with a thundering header in the seventh minute but the Hondurans, who qualified for the Olympics ahead of the United States, rode their luck with the Spanish hitting the woodwork three times.
Spain protested strongly for a penalty in the final minutes and at the final whistle they surrounded the referee in an animated protest.
Japan, who beat Morocco 1-0 on Sunday, top the group with six points and are through to the last eight. Honduras are second on four points and will go through with a draw against Japan on Wednesday.