The US House of Representatives has voted to increase government funding for embryonic stem cell research.
Mr Bush met children who were adopted as frozen embryos
The vote sets up a confrontation with President Bush, who has vowed to veto the bill if it passes the Senate.
The bill was passed by 238 to 194 votes - short of the two-thirds majority required to override Mr Bush's veto.
The vote followed an emotional debate between those who say the research is vital for medical progress, and those who say it destroys human life.
The bill would allow scientists to use stem cells from embryos created during in-vitro fertilisation programmes but never implanted in a womb.
Researchers believe stem cells - which can transform themselves into many other tissue types - hold the key to finding cures for many diseases, including Parkinson's and diabetes.
In 2001, Mr Bush declared that federal funding would be available only for research using existing stem cells - meaning that none have been harvested since.
The bill, sponsored by Republican Congressman Mike Castle and Democrat Diane De Gette, aims to overturn that ban.
During the debate, Republican Representative Charlie Bas spoke for the bill's supporters, urging Congress to consider the medical cures that might be discovered and the people that would benefit.
"For America to stand back because of a moral principle and not allow sound scientific research to proceed under the umbrella of the National Institute of Health, I think, is unconscionable," he said.
Many Catholics and social conservatives in the US oppose the destruction of embryos.
Republican Majority Leader Tom DeLay said the bill would mean taxpayers funding "the dismemberment of living, distinct human beings".
But a number of conservative Republicans, who usually back the pro-life lobby, broke with the party mainstream to support the bill.
Mr Bush, who has never used his power of veto, restated his opposition to the bill before the vote.
STEM CELL MILESTONES
1960s: Research begins on stem cells taken from adult tissue
1968: Adult stem cells used to treat immune deficient patient
1998: US scientists grow stem cells from human embryos and germ cells, establishing cell lines still in use today
2001: Embryonic stem cell turned into a blood cell
2004: South Korean scientists clone 30 human embryos and develop them over several days
2005: Korean team develops stem cells tailored to match individual patients
"This bill would take us across a critical ethical line by creating new incentives for the ongoing destruction of emerging human life," the president said.
"Crossing this line would be a great mistake."
No date has been set for a vote in the Senate, but the Republican leader in the upper chamber, Bill Frist, is coming under pressure from the bill's sponsors to allow a debate soon.
A second bill which calls for extra funding for stem cell research using umbilical cord blood, and which has presidential backing, was passed by 431 votes to 1.
Scientists say these cells could provide tailor-made treatment for a range of diseases and conditions. But many experts believe both types of research are needed.
There is no law against private stem cell research, which is moving ahead in states like California.