- The defeat is Wood's third in a 29-fight career, while Mexican Lara has won his maiden world title.
- Promoter Eddie Hearn said Wood - who was up on all three judges' scorecards at the time of the stoppage - now plans to activate his rematch clause.
Leigh Wood's reign as WBA featherweight champion is over after the Briton lost in devastating fashion to hard-hitting Mauricio Lara in Nottingham.
The 34-year-old seemed to be in control of the fight and was landing with ease through rounds three to six, before Lara unleashed a sensational left hook in the seventh.
Wood hit the canvas and bravely got back to his feet.
But clearly hurt, his trainer Ben Davison threw in the towel.
The defeat is Wood's third in a 29-fight career, while Mexican Lara has won his maiden world title.
"Congratulations to Mauricio Lara, he's great fighter," Wood told DAZN. "I made a mistake and paid for it."
Promoter Eddie Hearn said Wood - who was up on all three judges' scorecards at the time of the stoppage - now plans to activate his rematch clause.
"Firstly, well done to Leigh Wood for taking a fight like this - everyone knows how dangerous Mauricio Lara is," Hearn said.
"I thought Leigh was cruising that fight, won four rounds on the spin, but Mauricio Lara came with a left hook from the heavens."
Heartbreak for Wood in thriller
A fight widely expected to be a shootout between arguably two of the biggest punchers of the division did not disappoint.
The atmosphere and volume moved up a notch as Wood made his entrance, with almost every fan in the arena on their feet. Lara - dressed in red and wearing a sombrero - was unfazed.
Wood channelled that support in the opening round to connect with a looping left and straight right, but was cut above the left eye after an accidental clash of heads.
The champion started strongly in the second, connecting to Lara's body and following it up with an uppercut, but it seemed to spur Lara on and he launched a ferocious attack towards the end of the round.
Relentless punching to the head and body had Wood - with blood dripping down the side of his face - wincing.
But Wood recovered brilliantly to land a terrific straight right in the third, and followed it up with more single shots which pierced Lara's guard. The fight was delivering on all expectations.
With Lara's unconventional style - punching from angles with a straight-on stance and leaving himself open - Leigh started to land more frequently in the fourth.
Lara nodded and smiled after taking a body shot from Wood in the fifth - perhaps a sign he was hurt and which way this fight was heading.
Wood got a real foothold in the sixth as a desperate Lara started to get more reckless and was missing wildly.
Lara was going to be a danger at any time in the fight, however, and he stunned the East Midlands crowd with a fantastic short left hook to end Wood's night.
With Wood unsteady on his legs, Davison saved his fighter from any more damage.
Wood seeks rematch as Lara & Warrington clash ringside
With so much emphasis nowadays put on protecting an unbeaten record, Wood has bounced back from defeats before and should be applauded for taking on a feared puncher in Lara as a voluntary defence, when easier options were available.
Although Wood is keen on the rematch, two-time world champion Josh Warrington was ringside and clashed with Lara post-fight. Warrington accused Lara of spitting at him and was held back by security from entering the ring.
Lara later admitted spitting at his former foe. He told IFL TV: "Of course I did. Because it's personal between me and him and that's the way it will always be."
Warrington suffered a shock first career defeat by Lara in February 2021, before their rematch seven months later was declared a technical draw after an accidental head clash in the second round.
"Of course I would like that trilogy [with Josh Warrington]," said Lara. "I want as many belts as possible, but it's up to Eddie Hearn to make that decision."
Wood himself was eyeing a lucrative all-British match-up against Warrington in a stadium fight at his beloved Nottingham Forest's City Ground.
There is still a slight chance that fight could happen, with Leeds fighter Warrington also coming off a defeat having lost his IBF title to Luis Alberto Lopez in December.