Darren Clarke, slowly returning after coping with the death of his wife two years ago, also failed to earn a spot at Royal Birkdale in the 36-hole qualifier for European Tour players at Sunningdale.
Simon Wakefield of England and Ariel Canete of Argentina were co-medalists at 133 to lead 18 players who qualified. Peter Baker holed a 40-foot birdie putt to get into a six-man playoff for two spots. Baker and Simon Dyson advanced.
Olazabal, who played in the Ryder Cup in 2006 and was in the final group with Tiger Woods in the British Open at St. Andrews three years ago, has played sparingly this year after recovering from rheumatism. He followed a morning 71 with a 65, but the 40-year-old Bakers late birdie putt forced the playoff.
Also failing to qualify were Rory McIlroy, the low amateur at the British Open last year, and Paul McGinley, who has played on the last three Ryder Cup teams for Europe.
Clarke and others who didnt make it through still have a chance to get into the British Open if they are among the top five at the European Open or the Scottish Open the next two weeks.
The British Open is July 17-20 at Royal Birkdale.