The Three Lions went behind in the 35th minute when Claudio Marchisio drilled an effort into the bottom corner from range, but they were back on level terms moments later as Daniel Sturridge finished off a slick counter-attack.
Here, Sports Mole takes an in-depth look at a thoroughly entertaining Group C match in Brazil.
On target: 5
On target: 4
Was the result fair?
In truth, a draw would have been the fairest result this evening. The match was an entirely different affair to what we expected as both sides played open and entertaining football from the first whistle. It was a free-flowing encounter for the most part and both sides looked dangerous whenever they came forward.
As expected, Italy had the lion's share of possession, but England were happy to allow that as they looked to hit the Azzurri on the break. They did that with success on a number of occasions and, while their tally of 18 shots includes many from range, they created enough decent chances to have warranted something from this game.
Overall, it was an even game between two evenly-matched sides. The telling difference, however, was Italy's cutting edge and ability to finish their chances. Mario Balotelli, for example, had one clear chance and scored one goal. Wayne Rooney, on the other hand, missed his golden opportunity to end his World Cup duck. The Italians always seem to find a way, and that is exactly what they did tonight.
Ignoring for a second the overwhelming disappointment of defeat in the opening match of a World Cup, England's performance today was a positive one that inspires optimism. The Three Lions have played dull and dreary football in the last few tournaments, but that was far from the case this evening.
The inclusion of Raheem Sterling in the starting lineup suggested that they were going into the match with a more positive outlook, and that was certainly the case. They attacked with more pace than we have seen from them for a long time, and the gamble - if it can be called that given his recent form - to start Sterling paid off big time.
There are still concerns. Once more the defending was poor at times, particularly from set pieces, and they had consistent problems down the left flank, where Italy got a lot of joy. They also lacked a bit of quality in the final third at times, with the killer ball missing from promising attacks.
However, the defeat is not a demoralising one for Roy Hodgson and his men, who can hold their heads up high after an entertaining and refreshing display. If they play like that in the next two games, they will have a very good chance of going through and - perhaps just as importantly - entertaining their fans along the way.
Pretty much trademark Italy. They weren't completely dominant - certainly not as much as they were in the Euro 2012 meeting between the same sides - but they managed to find a way to win, as they always seem to do. They kept the ball well and always looked threatening when they came forward.
They enjoyed particular success down the right flank, where they ran riot at times. Antonio Candreva and Matteo Darmian took full advantage of some lax defending from England to terrorise Leighton Baines. Both of the Azzurri's goals came from the right wing as they continually exploited the weak spot for the Three Lions.
Defensively, they were suspect at times as they struggled to deal with the pace of Sterling, Sturridge and Danny Welbeck. However, they largely limited England to long shots and counter-attacks, although they were let off the hook by some poor finishing as well.
Overall, they will probably need to improve if they harbour any hopes of adding a fifth star to their badge and moving level with Brazil, but they will be pleased with their display as a whole tonight. With Uruguay losing earlier today, they are now very much in pole position to qualify top of Group D.
Sports Mole's man of the match
Antonio Candreva: Not a name many would have expected to be the star of the show tonight, but Antonio Candreva was the man behind repeated raids down the Italian right. Baines simply couldn't handle the right-midfielder for the vast majority of the game, and the Everton man wasn't given much help from Wayne Rooney in the first half.
Candreva delivered the ball for Balotelli's winning goal, playing a perfectly-weighted cross towards the back post to beat Gary Cahill and land it on the head of his striker. He also hit the post himself and was Italy's biggest danger for the whole match.
He was ably assisted by Matteo Darmian, while Andrea Pirlo once again deserves a mention. From England's side, Raheem Sterling shone and would have been the recipient of this award had England managed to get anything out of the game, but Candreva's contribution to a winning effort gives him the edge.
This one has to go to Wayne Rooney, who was presented with a glorious chance to level the scores and end his World Cup duck shortly after the hour mark. Baines found him in space inside the box and the Manchester United man moved the ball onto his stronger foot before lining up to shoot.
He gave Salvatore Sirigu the eyes and fooled the keeper into thinking he was going for the far corner, but he could only drag his shot wide of the near post with half of the goal to aim at. It really was a golden opportunity for a player of his quality, and he simply had to score.
Bjorn Kuipers had a good game tonight, which makes a welcome change from some of the officiating we have seen in this World Cup so far. He had two penalty decisions to make - one for either side - and he waved both away. Both were borderline, and another ref may have given them, but you can certainly see Kuipers's reasons for turning them down.
England: England's second group game against Uruguay on Thursday is now a must-win and possibly a winner-takes-all encounter with both sides losing their opening matches.
Italy: Italy, meanwhile, take on Costa Rica on Friday looking for a win that would all but seal their place in the last 16.