Japan, the first team to qualify for next year's World Cup in Brazil, could not capitalise on their dominance of possession and also paid the price of a shaky defence that allowed Forlan, Luis Suarez and Alvaro Gonzalez to score.
Shinji Kagawa and Keisuke Honda reduced the deficit for Japan with second-half strikes but the team's porous defence was a worry for coach Alberto Zaccheroni.
"They were in better physical condition than we were," Zaccheroni was quoted as saying by Kyodo news agency. "As a team and on an individual basis, we made too many mistakes.
"Uruguay are one of the top teams in the world. I thought they were a very good team at the Confederations Cup and they showed that here in Japan."
Both goalkeepers were kept busy in the opening 20 minutes with Japan's Eiji Kawashima twice denying Liverpool striker Suarez who posed a constant threat to the hosts.
Suarez, whose club has turned down Arsenal's 40 million and one pound ($62 million) offer for him, beat the offside trap in the 27th minute to dart into the box from the left and feed Forlan who slotted it home.
Two minutes later, 2010 World Cup Golden Ball winner Forlan curled in a 20-metre free kick after Yasuyuki Konno had fouled Suarez.
Forlan, again set up by Suarez, nearly completed a hat-trick in the 35th but was denied by another brilliant save by Kawashima who also foiled Cristian Rodriguez's 20-metre effort just before halftime.
Suarez got on the scoresheet seven minutes after the break, slotting home after Maya Yoshida failed to clear a cross.
A defensive blunder by Uruguay allowed Japan to pull one back when Honda's deft lob reached Kagawa and the Manchester United player tapped it into an empty goal.
An unmarked Gonzalez headed in on 58 minutes to put Uruguay 4-1 up but Japan reduced the gap once again when Honda's stunning free kick took a slight deflection before finding the net.
The hosts stepped up their attack in the last 10 minutes but Honda's spectacular attempt sailed over while Shinji Okazaki and Yasuhito Endo shot wide.
In Suwon, around 45 km (27 miles) south of Seoul, South Korea dominated their match against Peru but were let down by poor finishing against their higher-ranked opponents.
(Reporting by Amlan Chakraborty in New Delhi; Editing by Sonia Oxley)
