With 31 votes in favour, 38 votes against and two abstentions the voluntary termination of pregnancy bill is rejected.
Pro-life and pro-choice campaigners had gathered outside parliament to hear the result.
Daiana Anadon, leader of the feminist group Wave, said she and hundreds of other women would stay "until the final moment because we believe the power of the street will move the situation".
For some pro-choice supporters, the anger turned to violence and they lit fires and threw missiles at police, and they say they won't give up their fight.
By Wednesday night, the Senate's debate stretched more than 10 hours.
The bill had sought to legalise abortion during the first 14 weeks of pregnancy and would have seen Argentina join Uruguay and Cuba as the only countries in Latin America to fully decriminalise abortion.
Many women, a lot of them poor, have risky and degrading abortions every year - and activists estimate 3,000 have died since 1983.
Argentina's lower house of Congress already passed the measure, and President Mauricio Macri said he would sign it if approved by the Senate.
Despite false warnings to the contrary, no woman or medical professional is in prison for practicing abortion in Argentina, despite its illegal status.
For many of them, the methods used to induce an abortion include using an IV tube with a sharp wire clothes hanger or a knitting needle to try to break the amniotic sac inside womb.
The alleged "human rights" organization Amnesty International has been hammering Argentina to repeal its constitutional provision protecting preborn babies from abortion.
Jose Miguel Vivanco, director for the Americas at Human Rights Watch, said that Argentina had a "historic opportunity" to protect the rights of women.
Rallies took place around the world in front of Argentine diplomatic missions, mainly in support of the bill. There are three exceptions: if a woman is raped, pregnancy puts her life in danger, or the fetus is brain-dead.
Chile's constitutional Court previous year upheld legislation ending the Andean nation's absolute ban on abortions, permitting the procedure when a woman's life is in danger, when a fetus is not viable or in cases of rape. Chile had been the last country in South America to ban abortion in all cases, though several nations in Central America still have absolute prohibitions.
It is also legal in Mexico City.
"It is not a question of beliefs, but of a problem that exists", Fernandez said.
"We do as the Nazis did to safeguard the purity of the race, but we do it with 'white gloves, '" he said.