Gay rights campaigners have welcomed the rejection by the Church of England's Synod of a call for continued opposition to same-sex marriage.
The House of Bishops's report maintained church marriages should be between men and women, and same-sex relationships cannot be blessed - but the House of Clergy dismissed it.
Campaigner Peter Tatchell said it was a "victory for love and equality".
But conservative evangelicals have expressed disappointment.
What was in the report?
The report by the House of Bishops called for a "culture of welcome and support" for gay Christians, but stopped short of accepting same-sex unions.
It had been criticised for failing to give gay people a voice, while Evangelicals suggested it went too far.
The failure to recommend the Church change its opposition to same-sex marriage was a sticking point for many campaigners.
Why was it being discussed?
The debate over the report's contents was held to allow members of the Church's national assembly to have their views heard.
The vote on the report was symbolic and not binding, but will be used to inform the House of Bishops' work and future discussions on sexuality and same-sex marriage.
So how was it rejected?
The House of Bishops voted overwhelmingly (43-1) in favour of the document and its proposals, and the House of Laity - made up of ordinary members of the church - backed it by 106 votes to 83.
But to win approval the report had to win backing in all three houses and the House of Clergy - made up of vicars, rectors and priests - rejected it by 100 votes to 93, with two abstentions.
In effect, this means the Church of England's ruling body voted not to "take note" of the document.
Bishops will now have to produce a new report on the issue.
What has the reaction been?
The decision was welcomed by LGBT rights campaigners, some of whom had staged a protest ahead of the debate.
Lucy Gorman, an activist and Synod member from York said: "Thank you Synod. With that vote we've sent a message to the outside world."
Peter Tatchell, who has campaigned on the issue over five decades, said: "This vote to, in effect, reject the Bishops' report is a victory for love and equality.
"It is the biggest defeat for the Anglican leadership in many decades. Synod refused to endorse the anti-LGBT exclusion and discrimination enshrined in the Bishops' recommendations."
The Reverend Bertrand Olivier, who is gay, became a priest 21 years ago.
He said: "I was ordained as an openly gay candidate then and it's been going backwards ever since at the same time as the nation has moved on and we now have legal same-sex marriage."
But the Right Reverend Pete Broadbent had said campaigners may be asking too much.
"Our role is to hold the Church together and say we can only go as far as the whole church can agree. Campaigners are actually wanting us to go further, more hurriedly, than we necessarily can," he said.
Concluding the debate, the Archbishop of Canterbury Justin Welby, who supported the report, called for a "radical new Christian inclusion".
He added: "The current report is not the end of the story. We will - as the bishops - think again and go on thinking. We will seek to do better."
What happens next?
It is back to the drawing board for the House of Bishops.
The report cannot come back to the Synod - the Church's ruling body - for discussion in its present form and the group is likely to work to produce another document, taking into account the views aired at the debate.
By Martin Bashir, BBC religious affairs correspondent
There is no easy way to dress up what was an embarrassing night for the senior leadership of the Church of England.
After three years of so-called shared conversations costing the church more than £300,000, General Synod has chosen not to take note of the Bishops report.
It was neither the Bishops nor ordinary members of the church (the laity) who chose to reject the report. It was the vicars, rectors and priests that decided they could not continue with the current prohibition on blessing or marrying same sex couples in church.
The Bishops had said that the report was not the "final word" but rather a stepping stone toward greater inclusiveness.
But General Synod's decision not to "take note" means that it can no longer play any part in future discussions. The slate is wiped clean; who gets to write the next chapter is at this stage unclear.