Three Democrats joined Republicans in opposition to the bill, The New York Times reported. The measure failed to get the 60 votes needed to end a filibuster, with the final vote 55-41.
The 9-year-old DREAM Act would open a pathway to permanent residency and eventual citizenship for illegal immigrants brought to the United States as children if they have the equivalent of a high school degree, or enter college or the military.
Supporters of the DREAM Act say it gives motivated children the opportunity to achieve their potential; critics claim it would reward lawbreakers and take jobs from Americans. Sen. Dick Durbin, D-Ill., said the bill was a rare vote "on the issue of justice."
"Thousands of children in American who live in the shadows and dream of greatness," he said. "they are children who have been raised in this country. They stand in the classrooms and pledge allegiance to our flag. They sing our star-spangled banner as our national anthem. They believe in their heart of hearts this is home. This is the only country they have every know."
Young Hispanics crowded the galleries, with many wearing mortarboards, the flat graduation caps.