McGregor came out of retirement for a third time to face fellow 32-year-old Poirier at Abu Dhabi's Fight Island.
And although the Irishman edged the first round, Poirier unleashed a flurry of punches to seal a technical knockout two minutes 32 seconds into round two.
"I'm gutted, it's a tough one to swallow," said McGregor.
"His leg kicks were good, my leg was dead and I wasn't as comfortable as I needed to be. I have to dust it off and come back."
Poirier admitted McGregor had won the mind games before they stepped into the octagon for their first clash - a featherweight bout in September 2014 - and the American was stopped inside 106 seconds.
That set "the Notorious" on course for global stardom. He became the UFC's first simultaneous two-weight champion before facing Floyd Mayweather in one of the richest bouts in boxing history in 2017.
Despite having just two UFC fights since, losing to Khabib Nurmagomedov in 2018 and beating Donald 'Cowboy' Cerrone in 40 seconds last January, McGregor seemed to start well.
He survived an early takedown in front of about 2,000 fans at the 18,000-capacity Etihad Arena, opened before the UFC's third stint on Fight Island, and pinned Poirier against the fence for most of the first round, landing a few shoulder strikes like those that did so much damage against Cerrone.
McGregor said before the fight that, although he has achieved fame and fortune, he is still motivated to build a "highlights reel like a movie" in the UFC, and he tagged Poirier with a couple of right-hand shots.
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