The British No.2 led by a set and a break but failed to make the most of his advantage and was eventually beaten 6-7 (7-5), 6-4, 6-3.
Edmund had gone into the game full of confidence after a strong start to the hard-court season including a narrow loss to Grigor Dimitrov in Washington last week.
He recovered from an early break by the 35-year-old Spaniard to force a first set tie-break in which he held his nerve to take the lead in the match.
Edmund broke again early in the second but Ferrer, now down at 33 in the world, used all his experience to break twice in quick succession as he pulled back level.
Another break by Ferrer early in the third appeared to leave Edmund down at out at 3-0 but the 22-year-old came back to give himself hope.
However, having narrowed the deficit to 3-4, Edmund was immediately broken again, giving Ferrer the opportunity to serve out for victory.