Mayor Marty Walsh tried and failed to negotiate a deal with the conservative Allied War Veteran’s Council to allow members of MassEquality, one of the state of Massachusetts’s largest gay activist groups, to join the parade.
The Council argued that to do so would conflict with their Roman Catholic heritage.
“So much of our Irish history has been shaped by the fight against oppression,” Walsh, the city's first Irish-American mayor in 20 years, said in a statement.
“As mayor of the city of Boston, I have to do my best to ensure that all Bostonians are free to participate fully in the civic life of our city.
"Unfortunately, this year, the parties were not able to come to an understanding that would have made that possible," he added.
Other prominent fellow Democratic Boston politicians, including Representative Stephen Lynch, did march in the parade, which drew tens of thousands of spectators.
Organisers of St. Patrick’s Day parades in New York, which like Boston is broadly liberal, have also been criticised in recent years for banning LGBT marchers.
New York’s Mayor Bill de Blasio said he would also not march in his city’s parade on Monday because LGBT activists had been precluded from taking part.
Representatives for the New York board of the Ancient Order of the Hibernians, which has run the parade for more than 150 years, could not be reached for comment on Sunday afternoon.
Beer brand Guinness withdrew its sponsorship of the New York parade, while Boston Beer Co and Heineken did not back either parade over the issue.
However, while MassEquality was not allowed to participate in the parade, South Boston resident Randy Foster and his husband Steve Martin were behind a diversity-themed float, but with no direct LGBT rights messages.
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