The 83-vote defeat will place immense pressure on the Labour leader to throw his party's full weight behind demands for a second referendum on EU withdrawal.
Mr Corbyn told Labour MPs on Monday that he was ready to support moves to demand a public vote "to prevent a damaging Tory Brexit being forced on the country".
His amendment sought support for his party's five Brexit demands.
The party is calling for a permanent and comprehensive customs union with the EU; dynamic alignment on rights and protections; commitments on participation in EU agencies and funding programmes; "unambiguous" agreements on the detail of future security arrangements; and close alignment with the single market.
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Liberal Democrats have tagged their own amendment on to Mr Corbyn's proposals, calling for an extension of Article 50 to provide time for a referendum.
However, tonight the amendment was rejected.
Labour's annual conference voted to keep a second referendum on the table, but made clear that the party's priority was an early election to allow it to implement its Brexit plan for a customs union with a UK say, close ties with the single market and dynamic alignment with EU workplace and environmental regulations.
MPs also rejected a Scottish National Party amendment to rule out a no-deal Brexit in any circumstances and at any time by a margin of 288-324.
And, a proposal from Conservative backbencher Alberto Costa for a UK/EU treaty to protect expat citizens' rights in the event of a no-deal was passed without a vote.
Mr Costa quit his position as an unpaid parliamentary aide in the Scotland Office, despite Home Secretary Sajid Javid saying he supported his proposal and Downing Street making clear that Mrs May does not oppose it.
Shadow Brexit secretary Sir Keir Starmer tweeted: "Disappointed the Government has rejected Labour's alternative Brexit deal.
"We must do all we can to protect jobs and the economy. That's why Labour will put forward or support an amendment in favour of a public vote to prevent a damaging Tory Brexit."