A new policy affirming its traditional stance was backed by members of its governing body meeting in St Louis, Missouri. It passed by 438 votes to 384.
One leader said the result resolves long-running debate over how the Church "can best accomplish our mission of making disciples of Jesus Christ for the transformation of the world".
Bishop Scott Jones from the Texas Conference added: "This decision is consistent with our denomination's historic stance on human sexuality, outlined in the Book of Discipline since 1972.
"We will continue to welcome lesbian, gay, bisexual, transgendered and queer persons to our churches and affirm their sacred worth.
UMC President Bishop Kenneth H. Carter
"I pray we, as a denomination, can now move forward, working with each other in the spirit of Christian love and joining together as one.
"We are stronger together in serving God's mission as a diverse body of Christ.
The result received cheers and singing by some members, while others responded with dismay.
Rev Tom Berlin from Virginia warned the policy, known at The Traditional Plan, was a "virus" as he called for the Church to pass an alternative motion which would support greater LGBT inclusion.
He said: "If the Traditional Plan is voted in, it will be a virus that will make the American church very sick.
"Many pastors are going to leave... There will be trials, and they will be on the news. The only news about the church will be about people we don't serve."
Formed by the merging of two American protestant denominations in 1968, the UMC boasts twelve million members worldwide (predominantly in the US).
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