The midfielder was back in Mauricio Pochettino's starting XI after missing Saturday's Premier League win at Wolves as a precaution.
Spurs captain Harry Kane earned the hosts victory with a second-half double after Luuk De Jong headed the Dutch side into the lead inside two minutes.
Here, Press Association Sport analyses Alli's performance at Wembley.
The 22-year-old was the most advanced of Spurs' central midfield trio. Playing just ahead of Harry Winks and Christian Eriksen, Alli was tasked with supporting lone striker Kane, with Lucas Moura and Son Heung-min supplying the attacking width. With Spurs trailing, he regularly pushed on alongside England captain Kane.
Alli was confident on the ball and constantly looking to slip team-mates through on goal. His ninth-minute pass led to Kane being denied by a block from PSV defender Nick Viergever, while a poke across goal saw Denmark international Eriksen fire straight at visiting goalkeeper Jeroen Zoet from close range with the goal gaping.
Although the former MK Dons man had limited defensive responsibility, he played a part in the away side's second-minute opener. Alli was man-marking goal-scorer De Jong on the edge of the Spurs 18-yard box but was blocked off, allowing the PSV captain to rise unchallenged and nod home.
England international Alli could easily have claimed a first-half hat-trick. He saw a spectacular back-heeled flick headed off the line by PSV defender Angelino following a Davinson Sanchez knock-down and was denied twice from close range by Zoet having broken into promising positions.
Alli, who last week signed a new contract until 2024, endured a frustrating Tuesday evening. His performance was bright, yet he failed to influence the Group B clash at the key moments. He lost scorer De Jong for the Eredivsie champions' goal and then failed to take advantage of a handful of presentable chances, before Kane revived Spurs' hopes of progressing to the knockout stages.