Chasing a target of 344 and resuming on 15 without loss, Otago was never out of the running and, at times, looked as though it may reach the target.
But crucial wickets at the wrong time ended any hope of victory for Otago and Northern Districts won by 25 runs.
Otago coach Rob Walter said his players never threw in the towel and he was proud of how the side batted.
''It was a hell of a four-day game. To go right down to the wire and only lose by 25 runs shows what a good game of cricket it was,'' Walter said.
''To get to 320 in the fourth innings on the fourth day of the game showed how hard the guys fought. Scoring was not easy, especially against their attack, but we tried very hard.''
When Brad Wilson and Shawn Hicks were together, Otago looked as though it had a chance to gain a win.
Wilson was steady as usual and kept the bowlers out against his old side. Hicks scored his first half-century at this level and the duo combined for a 147-run partnership.
But Hicks missed a straight one from Anton Devcich and was bowled and that caused angst for the home side. Two quick wickets followed with Wilson also going for a well compiled 111, off 228 balls, an innings which lasted nearly five hours.
Anaru Kitchen and Nathan Smith then came together and got the target down to under 50 runs with about 10 overs to go.
But Smith was adjudged lbw in what looked a debatable call.
That brought Jacob Duffy to the wicket and both he and then Michael Rae could not keep out Northern Districts spinner Ish Sodhi. There were eight overs left in the day's play when Sodhi took the 10th Otago wicket.
Sodhi ended with a five-wicket bag from 41.5 overs and his class shone though. Devcich picked up three wickets.
Walter said when Kitchen and Smith were together there was a real chance and even when Smith departed the push continued for Otago.
''From a points point of view it makes no difference whether you get a draw or lose so we wanted to push on. Of course. Northern gets the points from the win but it was a good game of cricket.''
He was happy with the pitch although he said it played more into the hands of Northern, especially legspinner Sodhi.
While Sodhi seems to be seen as a bowler for the shortened version of the game these days, he picked up nine wickets for the match and bowled more than 78 overs.
More worrying for Otago was the failure again of captain Rob Nicol, who scored just a single yesterday to go with a duck in the first innings.
Otago won its first game of the season against Canterbury but has lost four straight games since then.
The Plunket Shield takes a break now with the Ford Trophy one-day competition starting on Sunday when Otago heads to Rangiora to play Canterbury.
Otago A had a convincing win over Canterbury A in a one-day game at Rangiora yesterday.
Otago made 285 for five wickets in its 50 overs, Southland batsman Harsh Visavadiya leading the way with 120 while Josh Tasman-Jones made 50.
In reply, Canterbury A was dismissed for 216 in the 46th over. Warren Barnes, Ryan Whelan and Tasman-Jones all took two wickets for Otago A.
