A solitary first half Roberto Piccoli penalty clinched all three points in Matchday Four at the Bortolotti Sport Centre, condemning the visitors to back-to-back losses against the Italians.
Battling with difficult weather and pitch conditions, City started the brighter of the two sides, looking to attack the Atalanta goal with every opportunity.
Ian Carlo-Poveda, Adrian Bernarbe and Nathanael Ogbeta all tried their luck from the edge of the box inside the first quarter of an hour but did little to trouble goalkeeper Ludovico Gelmi.
Captain Taylor Harwood-Bellis then saw his backpost header tipped onto the post from Bernabe’s pinpoint delivery – the closest City would come to breaking the deadlock before the game swung in Atalanta’s favour.
Piccoli thought he had opened the scoring just after the hour mark, powering a header goalward which Gavin Bazunu did well to push wide. The offside flag had been raised however.
From the resulting free-kick, City were put under unnecessary pressure as Atalanta won a corner from a loose ball and were awarded a penalty from the set-piece, as Tom Dele-Bashiru was adjudged to have felled Piccoli. The striker stepped up to convert, confidently smashing the ball into the roof of the net.
The forward almost doubled the lead, forcing Bazunu into another smart stop on the stroke of half-time with a header from Federico Bergonzi’s cross.
Revitalised from their half-time team talk, City came flying out of the blocks in the second half and almost netted an immediate leveller but Morgan Rogers could only hit the side-netting from a narrow angle.
As the pitch continued to hamper any opportunity for slick passing, both sides struggled to carve out clear-cut chances.
Bazunu was called into action once again on the hour when Nicolo Cambiaghi drilled an awkward bouncing effort towards the far post, while Harwood-Bellis header over one of several fruitless City corners.
Atalanta almost capitalised on a corner of their own when Memeh Okoli connected powerfully – only to be denied well by Bazunu.
With time running out, Harsley introduced Cole Palmer and Liam Delap from the bench and the latter almost had an instant impact – wrongly flagged offside, before he then played Rogers through with a neat flick. Rodrigo Guth produced an excellent block to preserve his side’s clean sheet.
City were much-improved in the final stages, pressing for a leveller with a more direct approach, but still could not test Gelmi and Atalanta held on for the points.
How we lined up
Shot-stopper Bazunu was shielded by a backline of Alpha Dionkou, Rowan McDonald, Harwood-Bellis and Ogbeta.
A trio of Bernabe, Iker Pozo and Dele-Bashiru occupied the midfield, sitting behind an attacking trident of Poveda, Nabil Touaizi and Rogers.
What it means
The defeat leaves City in third place with two games remaining in Group C.
Atalanta’s victory lifts the Italian side three points above Harsley’s charges, while Dinamo Zagreb sit top with eight points from four games.
Fourth-placed Shakhtar Donetsk have two points with City still to hosts the Ukrainian outfit at the Academy Stadium before travelling to Croatia.
City’s EDS now break for two weeks before regrouping for domestic action with a trip to Blackburn Rovers in the Premier League 2 on Friday 22 November at 7pm.
Harsley’s side then host Shakhtar Donetsk on Tuesday 26 November (3pm) in Matchday Five of the UEFA Youth League with tickets available to purchase online or at the Etihad Stadium Ticket Office.