The vote of 61-30 essentially ensured that the Senate has the votes to pass the Employment Non-Discrimination Act that would prohibit workplace discrimination against gay, bisexual and transgender Americans.
Final passage, possibly by week's end, would cap a 17-year quest to secure Senate support for a similar discrimination measure that failed by one vote in 1996, the same year Congress passed and President Bill Clinton signed the Defence of Marriage Act.
Reflecting the nation's shifting views toward gay rights and the fast-changing political dynamic, seven Senate Republicans joined with 54 Democrats to vote to move ahead on the legislation.
"Rights are sometimes intangible but, boy if you've ever been discriminated against, seeking employment or seeking an advancement, it's bitter," Democratic Sen. Tammy Baldwin, the only openly gay member of the Senate, said after the vote. "And it's been a long, long fight, but I think its day has come. And that's just very exciting to witness."
The legislation would be the first significant gay rights legislation since Congress ended the ban on gays serving openly in the military in December 2010. The Supreme Court in June affirmed gay marriage and granted federal benefits to legally married same-sex couples while same-sex marriage is legal in 14 states and the District of Columbia.
About a half hour after the Senate acted, President Barack Obama cited the vote as an example of "common sense starting to prevail" in a Congress that has opposed much of his agenda.
"Inexorably, the idea of a more tolerant, more prosperous country that offers more opportunity to more people, that's an idea that the vast majority of Americans believe in," the president told a group of supporters gathered for a summit in Washington Monday night.
Prospects are dimmer in the Republican-led House where Republican Speaker John Boehner remains opposed.
Republican Sen. Susan Collins, a chief sponsor of the legislation, said the 60-plus bipartisan vote should force the House to vote on the legislation.
"It was Republican votes that made the difference tonight and that is a strong signal," Collins said. "I also think that attitudes are changing very rapidly on gay rights issues and we're seeing that with each passing day. More and more people have embraced equality."
The vote came as a stark reminder of the nation's changing views and lingering resistance to homosexuality. The political implications resonated in Maine, as six-term Democratic Rep. Mike Michaud, who is running for governor, said he was gay and questioned whether it still mattered to voters.
Tony Perkins of the conservative Family Research Council said in a statement that he was disappointed in the Senate vote, but "confident that the U.S. House of Representatives will ultimately reject (the legislation) because it not only threatens the free market but religious liberties as well."
Current federal law prohibits discrimination on the basis of sex, race and national origin. But it doesn't stop an employer from firing or refusing to hire workers because they are gay, lesbian, bisexual or transgender.
The bill would bar employers with 15 or more workers from using a person's sexual orientation or gender identity as the basis for making employment decisions, including hiring, firing, compensation or promotion.
The bill would exempt religious institutions and the military.
Twenty-two states and the District of Columbia have approved laws banning workplace discrimination on the basis of sexual orientation, and 17 of those also prohibit employers from discriminating based on gender identity.
About 88 per cent of Fortune 500 companies have adopted nondiscrimination policies that include sexual orientation, according to the Human Rights Campaign. About 57 per cent of those companies include gender identity.