The 16-year-old Queenslander, ranked world No.1, was upset 6-3 6-4 by fourth seed Wakana Sonobe of Japan.
Jones was hoping to best last year's result in the singles when she finished runner-up, while also suffering the same heartbreak in the Wimbledon final.
Japan's Wakana Sonobe (right) is through to her second successive junior grand slam final. (Joel Carrett/AAP PHOTOS)
The Gold Coaster will bid for a doubles title later on Friday alongside Great Britain's Hannah Klugman, with the pair taking on 15-year-old American identical twins Annika and Kristina Penickova.
Kristina Penickova is also in the final of the girls' singles, having beaten Slovakia's Mia Pohankova 6-4 4-6 7-5 earlier on Friday, and is now herself in line to become the first player to win both singles and doubles Open junior titles since Taiwan's Liang En-Shuo in 2018.
Looking to become the first Australian since Siobhan Drake-Brockman in 1995 to win the girls' title at Melbourne Park, Jones started slowly, losing her opening serve to trail Sonobe 2-0.
She broke straight back only for her serve to again falter, with Sonobe consolidating for a 4-1 lead.
The top-ranked Japanese player, who eliminated another Australian Tahlia Kokkinis in the quarter-finals, kept control to wrap up the set in 31 minutes.
While Jones was able to rebound from a one-set deficit in her quarter-final win over Austrian Lilli Tagger, there was no fighting comeback this time around.
She showed flashes of brilliance, saving one match point with a searing backhand return off a booming left-handed serve from Sonobe that the Japanese player was unable to control.
But she eventually succumbed on a second match point when her bold forehand return wide just missed.
With her first serve also dominant, Sonobe smashed 25 winners to Jones's 13 to seal the win in 74 minutes to give herself another grand slam opportunity having finished as girls' singles runner-up at the 2024 US Open.
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