Paine, which trailed by 27 points with 12:11 to play in the game, cut the lead to 82-80 with 1:41 left, but then ran out of gas.
Kentucky State outscored Paine 6-2 the rest of the way.
Kentucky State led for much of the first half and built a 39-24 halftime lead.
Freshman guard Julian English came off the bench to score 20 points for Paine, which lost four of its final six games in a 17-10 season.
Larry Williams had 31 points and 11 rebounds for Kentucky State (15-14), which advances to tonight's semifinals against Fort Valley State, a 72-59 winner over Miles.
In that game, the winners scored the first 14 points of the game and led 49-29 at halftime.
Chauncey Hall had 26 of his game-high 31 points for Fort Valley State (17-11) in the first half.
Miles finishes at 14-15.