Sue Ronan's side had the best of the chances in the game but Portugal captain Claudia Neto headed home from close-range, after Emma Byrne saved her penalty, to seal three points for the away side.
Ireland should have been ahead in the second minute of the game. Ruesha Littlejohn didn't let the ball go out and found a wonderful back-heel pass to Julie Ann-Russell who found a fantastic cross to Aine O'Gorman whose looping header crashed off the cross-bar.
Ireland continued to dominate the first-half but without creating many openings. In their first attack, Portugal found space on the left to cross for Ana Leite to tuck home but Sophie Perry brilliantly blocked her effort on the line.
Sue Ronan's side continued to dominate possession and should have gone ahead seven minutes after the break. Once again, it was the UCD Waves pair causing problems as Russell found O'Gorman in behind but her low effort was well saved by the feet of Isabel Morais.
Portugal knew a win would see them qualify for the UEFA 2017 European Championships and began to create chances in the latter stages. First, Neto worked a corner short to turn inside and fire narrowly wide of the right-hand post before Neto delivered the match-winning blow.
Ana Borges broke down the left-side and was fouled by Jetta Berrill with a mis-timed challenge. The captain Neto stepped up but saw her poor spot-kick parried by Byrne, but she was first to the rebound to head home.
It proved to be the match-winning goal as late substitute Fiona O'Sullivan was denied from close range in added time.
Republic of Ireland: Byrne (GK)(C), Perry, Berrill, Quinn, Fahey, Duggan (McLaughlin 82), Caldwell, O'Gorman, Littlejohn (O'Sullivan 88), Russell (Shine 64), McCabe.
Subs: Reid-Burke (GK), McCarthy, De Burca, Beckett, Moloney (GK).
Portugal: Morais (GK), Rebelo, Fidalgo, Neto (C), Borges, Leite (Silva 90), Silva, Costa, Marques, Da Costa (T. Pinto 64), Pires (F. Pinto 82).
Subs: Marreiros (GK), Pereira, Fernandes, Silva, Mendes.