In her remarks explaining why she vetoed Senate Bill 1062, the Republican governor said she gave the measure "careful evaluation and deliberate consideration," but found it wanting in regards to proponents' contention it would have enhanced religious freedom.
"I call them like I see them, despite the cheers or boos from the crowd," Brewer said in a statement posted on her official website.
"I took the time necessary to make the right decision. I met or spoke with my attorneys, lawmakers and citizens supporting and opposing this legislation. I listened and asked questions.
"As governor, I have protected religious freedoms when there is a specific and present concern that exists in our state. And I have the record to prove it.
But, she said, S.B. 1062 "does not address a specific and present concern related to religious liberty in Arizona. I have not heard of one example in Arizona where a business owner's religious liberty has been violated. The bill is broadly worded and could result in unintended and negative consequences."
So she vetoed it.
"To the supporters of the legislation, I want you to know that I understand that long-held norms about marriage and family are being challenged as never before," she said.
"Our society is undergoing many dramatic changes. However, I sincerely believe that Senate Bill 1062 has the potential to create more problems than it purports to solve.
"It could divide Arizona in ways we cannot even imagine and no one would ever want. Religious liberty is a core American and Arizona value, so is non-discrimination.
"Going forward, let's turn the ugliness of the debate over Senate Bill 1062 into a renewed search for greater respect and understanding among all Arizonans and Americans."
Brewer had until Saturday to sign or veto the bill, passed by the state Legislature last week, or do nothing and let it automatically become law.
The decision she made had the backing of 2012 GOP presidential nominee and former Massachusetts Gov. Mitt Romney, who had joined a growing chorus of high-profile Republicans urging Brewer to veto the measure.
"@GovBrewer: veto of #SB1062 is right," Romney said on Twitter.
An executive from Apple Inc., which plans to build a major manufacturing plant in Mesa, called the governor to urge her to reject the measure. American Airlines Group Inc. Chairman and Chief Executive Officer Douglas Parker, overseeing the merger of American Airlines and Phoenix-based US Airways, sent Brewer a letter citing the state's "economic comeback" and saying, "There is genuine concern throughout the business community that this bill, if signed into law, would jeopardize all that has been accomplished so far."
The National Football League, which will hold Super Bowl XLIX next year at University of Phoenix Stadium in Glendale, said it was "following" the debate.
Democratic Delaware Gov. Jack Markell told MSNBC if Brewer signed the measure, "the NFL may be looking, or maybe should be looking, to move the Super Bowl out of the state."
Cathi Herrod, president of the Center for Arizona Policy, an architect of the bill, called attacks on the legislation "politics at its absolute worse."
"Instead of having an honest discussion about the true meaning of religious liberty, opponents of the bill have hijacked this discussion through lies, personal attacks and irresponsible reporting," she said in a statement.
The measure, passed by both chambers of the Republican-controlled Legislature, would have allowed businesses whose owners cited sincerely held religious beliefs to deny service to gays and others. It would have let them cite the law as a defense in any action brought against them claiming discrimination.
The bill was similar to measures that failed or faced major setbacks this month in five other states -- Idaho, Kansas, Maine, South Dakota and Tennessee. Similar bills are proposed in Georgia, Hawaii, Missouri, Ohio and Oklahoma, and one is being drafted in Utah.