Italy’s Arianna Fontana claimed gold, having been the runner-up in the event at the Games in Sochi in 2014.
Choi Min-jeong, 19, of South Korea finished second in Pyeongchang on Tuesday but was penalised, meaning Netherlands skater Yara van Kerkhof won the silver medal, with Canada’s Kim Boutin third.
Christie was in fourth place going into the final lap of the race before appearing to collide with Van Kerkhof. Had she finished in fourth, Christie would have been promoted to the bronze medal position following Choi’s disqualification.
Speaking after the final, an emotional and frustrated Christie told BBC Sport: “I was knocked over, I didn’t fall on my own. When there are five people in a final, it doesn’t give you any benefit when someone gets penalised.
“It is just tough. I have worked so hard for the 500m and it has been taken away from me.
“Even in the semi-final, I got crashed into and then ended up in lane four. I know it is short track and I am supposed to be prepared for this, but it still hurts.”
The three-time world champion is still searching for her first Olympic medal after being disqualified in three separate events four years ago.
Christie qualified for the race as fourth fastest after finishing second in her semi-final earlier on Tuesday.
The 27-year-old had set an Olympic record time of 42.703 seconds as she won the second quarter-final in Pyeongchang, but the record was beaten by Choi in the first semi-final.
Christie will compete in the 1000m and 1500m events later in the competition. Her coach, Nick Gooch, is the only other Brit to win a gold medal in speed skating.
“I have got a few days to reset but I can’t see myself living with this feeling,” said Christie. “It is out of my control. I got knocked over and that is that.
“I don’t think I will be taking many positives tonight.”