A first ever World Cup goal for captain Sam Kerr wasn't enough to avoid the defensive errors that plagued the side.
The Italians were unlucky as an early goal was called off-side with the help of the video assistant referee [[VAR]] - the first of many V-A-R calls to come throughout the match.
At the 20th minute, things appeared to be getting worse for the Italians, as captain Sara Gama knocked down Australian captain Sam Kerr in the box, resulting in a penalty.
While Sam Kerr was unable to score the penalty, a ball deflection from goal keeper Laura Giuliani gave Kerr a second chance, resulting in not only a score to give the Matildas the lead but her first ever World Cup goal.
The Australians began the second half in Valenciennes with a lead that was needed to calm its nerves.
But the elation was short-lived as Italy's Barbara Bonansea equalised just after half time.
And while Australia kept pushing in the attack, it wasn't enough as Bonansea scored another goal - this time in the 95th minute and a winner to seal the match.
