Rea retired with a technical problem after five laps, having run off the track while battling for the lead.
The Northern Irishman's Kawasaki team-mate, Yorkshireman Sykes, went on to take his fifth victory of the season.
Ducati pair Davide Giugliano and Chaz Davies completed the podium with less than a second covering the front three.
Race two was initially red-flagged after Pawel Szkopek crashed out but on the re-start Rea jumped from third to first, going up the inside of Sykes and Giugliano at the entry of the Corkscrew on lap four.
Looking to build his lead, Rea ran wide and on to the sandy run-off area, but was able to continue running down in 10th place.
Half a lap later the Isle of Man-based rider was forced to pull up to assess his Kawasaki ZX-10R, having picked up a suspected technical problem from his excursion.
The 29-year-old had taken his first win at the United States circuit in Saturday's opening race, holding off Sykes, with American Nicky Hayden in third.
Welsh rider Davies crashed out on lap six of race one in California while leading.
For Rea, that was his eighth win in this season's series and his third successive triumph following his double in the previous round at Misano, bringing his career tally of triumphs in the championship to 37.
Sykes' five wins include a double victory in the British round at Donington Park.
The series now takes an eight-week break, before the final run of rounds which takes in Germany, France and Spain, before concluding in Qatar on 29 and 30 October.
Tom Sykes cut Jonathan Rea's lead at the top of the World Superbike series standings to 46 points by winning race two at the Laguna Seca round on Sunday.