After an even start, it was City who created the first real chance of the game ten minutes in, as James McAtee danced past his man before hitting an effort from the edge of the box just wide.
The Everton goalkeeper was no doubt the star of the show for the Toffees at the Academy Stadium as he again denied City - this time with a double save - stopping Alex Robertson and then Sam Edozie from opening the scoring.
Despite all of City efforts, the visitors cruelly nicked the tie with the final kick of the game as Luke Butterfield found the bottom corner from 20-yards out.
Check out the best of the action via the video above.
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EDS & Academy
City 0-1 Everton: FA Youth Cup highlights
Manchester City Under-18s were cruelly knocked out of the FA Youth Cup after a 1-0 defeat at home to Everton at the Academy Stadium.