Northampton went into the game secure in the knowledge that they had qualified for the quarter-finals as one of the best-placed runners up.
To secure the all-important home tie though they needed to score at least four tries as well as denying Biarritz a bonus point.
Despite completely dominating the first half, the Saints could not find a way past a well-organised French defence, and second-half tries from Andrea Masi and Sireli Bobo ensured Biarritz won their Pool 6 by a record points margin.
Carlos Spencer signalled Saints' intention by kicking for touch instead of slotting over a simple penalty. However, Daniel Browne could not control Steve Thompson's line out and the chance passed.
The home side continued to go through the phases but ferocious tackling from the likes of Serge Betsen kept the Saints at bay.
Northampton did get on the scoreboard after 31 minutes. A brilliant break from inside his own half by full-back Robbie Kidd took the Saints deep into the French half before Benoit August was penalised for coming in round the side.
Spencer kicked the three points and the French side's indiscipline was again punished when winger Bobo and David Couzinet were given yellow cards.
But for all the home side's pressure, they could not make their numerical superiority count.
Instead Biarritz, in virtually their only attack of the half, came closest to finding the elusive try when Dimitri Yachvili broke down the blindside only for the Northampton defence to hold out.
However, Yachvili ensured the away side went into the break on level terms with a beautifully struck drop goal.
The scrum half should have given the visitors the lead moments after half-time but he hit a straightforward penalty against the post.
Despite still being a man down Biarritz kept the pressure up and eventually found the breakthrough when Masi surged past Ben Cohen to touch down with Yachvili adding the extras.
Spencer then missed a 30-metre penalty before Bobo wrapped up the victory with a sensational try after 64 minutes.
The Fijian winger received Masi's offload and then showed a clean pair of heels to the Northampton defenders as he sprinted 35 metres to dive over.
Replacement prop Soane Tonga'uiha grabbed a consolation try for the Saints after a rolling maul but it was too little, too late.