Playing in the final pairing and needing only a par to beat Colin Montgomerie, Kingston hit into the trees off the 18th tee and instead carded a double bogey six that gave Montgomerie the victory.
It was a similar ending to last year's event, when Kingston's drive on 18 landed next to a fence, leading to a bogey and a win for Miguel Angel Jimenez.
But last year Kingston and Jimenez were tied heading to 18. This year, the 40- year-old was one shot clear of Montgomerie heading to the final hole.
For his part, Montgomerie scrambled for a tough par at the 16th and then added two more par putts to finish off an even-par 70 round. His 9-under-par 271 for the tournament was good for a one-shot lead over Kingston and four other players.
Ever the classy player, Montgomerie was less than happy with the way he won his 30th European Tour title. In fact, the Scotsman looked downright depressed as Kingston walked off the 18th green.
'Everyone's heart goes out to James Kingston there on the last,' sighed Montgomerie, who just wrapped up his eighth European Tour Order of Merit title at the end of the 2005 season.
'That should have been a playoff at worst, to be honest, and then we would have had more drama coming down that last hole (in a playoff). It's a shame and I think we all feel for him -- every golfer who's ever played the game feels for someone that doubles the last to lose with a one shot lead.'
Indeed, things looked to be falling into place for Kingston to earn his first win. Playing partner and overnight leader Simon Yates stumbled to a double bogey on the first hole and a bogey at the fifth to fall back.
And with no player really taking charge of the final round, Kingston led around the turn after a birdie at No. 3 put him at minus-10.
He reached 11 under with his second birdie of the day at 15, but then began exhibiting jitters at the 16th, where an errant tee shot into the rough led to his first dropped shot since the second round.
But Kingston caught a break when Montgomerie missed a 12-foot birdie putt ahead at 17 that would have tied him with the leader.
Montgomerie played it conservative with an iron off the tee at the par-4 18th. He then missed an uphill birdie putt after his approach shot left him short of the cup.
Kingston also pulled an iron for his tee shot at the final hole. Only instead of hitting the fairway like Montgomerie, he sliced his ball into a group of moderately-spaced trees off to the right.
The only shot he had was sideways back onto the fairway, which he took. Then, in an aggressive move, Kingston attacked the pin with his third shot.
But the ball landed short of the hole on the right side of the green and spun back off the putting surface. A horridly short chip shot then left Kingston with an 8-foot knee knocker that he missed.
The double bogey left Kingston with a 1-over 71 for his final round and an 8-under-par 272 for the tournament. He shared second place with K.J. Choi (69), Keng-Chi Lin (69), Edward Loar (69) and Thammanoon Srirot (68).
First round leader Kang Wook-Soon, the last Asian player to win here when he titled in 1998, shot a final-round 71 and led a group of three players tied for seventh place. He was joined at minus-seven by Thongchai Jaidee (70) and Damien McGrane (71).
Finishing one stroke further back and alone in 10th place was Yates, whose final-round 75 included two double bogeys and two bogeys.