By the final stage of the third qualifying session, he had secured a second-place finish with the prospect of a front row start to the season.
But he was gobbled up by pole sitter Carlos Sainz and Ferrari teammate Charles Leclerc, as well as the Red Bulls of Max Verstappen and Sergio Perez.
“I’m a little upset,” Hamilton said afterwards. “Just such a great crowd and I was fighting so hard for pole and front row.
“In the dry, I don’t think we could compete for the top three. In the rain we had a chance today. But from the fifth it’s going to be difficult, but I’m going to work on pushing myself forward.”
Mercedes had come to Silverstone with major upgrades to the car, giving them hopes of closing the gap on leaders Red Bull and Ferrari.
Speaking of the upgrades, Hamilton said: “There was definitely an improvement. We seem to be a bit closed.”
Hamilton’s team-mate George Russell described himself as “disappointed” after qualifying in eighth place.
But looking ahead to the race, he said: “There is promise there. The pace on dry land looked very strong and our pace on dry land would be comparable to the guys up front. Starting P8 will not be easy. Being on P8 is not where we want to be.”