Having said the tournament could be his last as a professional due to his painful hip, Murray played as if it was indeed his swansong, rallying from two sets down before being denied 6-4 6-4 6-7(5) 6-7(4) 6-2 under the lights at a heaving Melbourne Arena.
The former world number one whipped the terraces into a frenzy as he pushed the match into a deciding fifth set, then left fans with hope he might eventually produce an Australian encore.
"If I want to go again, I'll need to have a big operation, which there's no guarantee I'll be able to come back from... but I'll give it my best shot."
Five times a runner-up at Melbourne Park, the Scot appeared doomed to a quick and painful finish after being broken early in the third set but he turned the match on its head with a pair of scintillating tiebreaks.
It seemed the momentum was all his as he entered the decider, with the terraces stamping their feet and his mother Judy and doubles-playing brother Jamie standing in support.
It was all a mirage, however, as Bautista Agut rallied to break the Scot twice and motored to a 5-1 lead.
It only stalled defeat briefly as Bautista Agut served out the match to love.
MURRAY MUST MAKE SURGERY DECISION
Murray now faces a Sophie's choice: to live with severe pain until his hoped-for farewell at Wimbledon or to undertake another round of major surgery.
The operation might improve his quality of life but also end his hopes of ever playing again.
He said he would make a decision within the week.
"But that's what I was saying the other day, that this might be my last match," he told reporters.
"If I go ahead with the operation, I don't recover well from it, then I don't play again. I'm aware of that."
Faced with a hostile crowd that barely murmured when he hit winners, Bautista Agut was majestic under pressure and could discern little between the world-beating Murray in his heyday and the hobbled opponent across the net.
Though limping and grimacing between points, Murray returned serve with venom and scrambled for a slew of brilliant retrieves as he reeled in the Spaniard.
"Andy deserved this atmosphere," said Bautista Agut. "It was an unbelievable match... I want to congratulate him on all he did for tennis.
"Today was more than a tennis match, it was a match with a lot of emotions."
Bautista Agut wasted no time subjecting Murray's hip to a fierce examination and clinically claimed the opening two sets with one service break in each.
Murray would not go quietly, however, and he broke back in the third set before sealing the tiebreak by slapping a volley down the line.
The Spaniard was suddenly the man hanging on as Murray dragged him into a second tiebreak and charged to a 6-1 lead before claiming it with a monster first serve.
However, the promise of a fairytale win was quick to fade as Bautista Agut knuckled down to deny Murray a longer stay in what may prove his last trip to Melbourne. (Reporting by Ian Ransom; Editing by Clare Fallon and Christian Radnedge)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)