That opened the door for Russia to win the gold in 42.31 seconds, followed by Belgium and Nigeria.
Jamaica was the prohibitive favorite in the race, with two gold and five overall sprint medals already won by its four-woman lineup, and without any competition from the United States, which botched a handoff in preliminaries the night before.
Simpson was pushing Jamaica into the lead near the end of her leg. Stewart took off, reached her arm back and never received the baton.
Simpson ran into Stewart and stopped running, which left Veronica Campbell-Brown, who ran the fastest 200 meters in a decade the night before, without a chance to run her anchor leg.
With only the men's 400 relay remaining, Jamaica fell to 4-for-5 in the Olympic sprints, leaving the United States in 1984 as the only country to sweep all six Olympic sprints.
Earlier, Tirunesh Dibaba of Ethiopia completed an unprecedented women's distance double by adding the 5,000 meters to her 10K victory.
In the long jump, Maurren Higa Maggi of Brazil won with a leap of 23 feet, 1¼ inches (7.04 meters).