Houston voters have rejected moves to enact protections for transgender and gay people after a divisive campaign that has lasted more than a year.
The Houston Equal Rights Ordinance would have extended protection over housing, employment and other areas.
Voters rejected the ordinance by a margin of 62% to 38%, Houston news channel KHOU reported.
In the most contested portion, the move would have allowed transgender people to use toilets of their choosing.
Opponents feared that the so-called “bathroom bill” would have allowed sexual predators into women’s toilets.
“I don’t know why anyone would think that men going into a women’s bathroom or swimming pool or locker room would be a good idea,” Susan Hunter, who voted against the ordinance, said on Tuesday.
“It’s not safe and these people need to find another solution,” she said.
Gay rights groups disputed the connection between sexual predators and allowing transgender people access the toilets of their choosing.
Democratic Houston Mayor Annise Parker, who is gay, called the “bathroom bill” strategy a scare tactic.
The bill had received high-profile support from US President Barack Obama, Democratic presidential hopeful Hillary Clinton and Apple CEO Tim Cook.
In May 2014, the Houston City Council initially approved the Houston Equal Rights Ordinance, but a legal challenge forced the ordinance to go before voters for approval.
Houston is the largest city in the US without such an ordinance.