Counsel for the plaintiffs had argued that federal agents were at least partly responsible for the deaths of the cult members.
About 100 survivors and relatives of the dead had sued the government for $675m, alleging that agents had used excessive force to end the 51-day siege.
The stand-off ended in a fire on 19 April, 1993 at the cult's Mount Carmel compound, Texas, with at least 17 children among the dead.
Counsel for the plaintiffs had argued that federal agents were at least partly responsible for the deaths of the cult members.
But government lawyers said the blame lay squarely with the sect and its leader David Koresh, whom agents were trying to arrest on weapons charges. He was among the dead.
After deliberating for over two hours, the five-member jury found that agents of the Bureau of Alcohol, Tobacco and Firearms (ATF) were not responsible for provoking the stand-off, and that FBI agents were not to blame for starting or contributing to the fatal fire.
'Tragedy'
The jury's decision is an advisory one only, and a federal judge will take the ruling into account before delivering a final verdict himself - probably some time next month.
Nonethless, plaintiffs' lawyer and former attorney-general Ramsey Clark said in impassioned closing arguments that the deaths of the cult members "didn't have to happen" and called the siege "the greatest domestic law enforcement tragedy in the history of the United States".
"If the conduct of the ATF and the FBI was performed without excessive force and without negligence, then how in the world did it end up with such unmitigated, disastrous effects?" Mr Clark asked.
The BBC's Washington correspondent says the jury's finding is unlikely to silence America's many conspiracy theorists and anti-government activists who hold up the Waco siege and fire as a prime example of government interference in people's freedom.
The government blamed Branch Davidians for lighting the fires that consumed the compound and said firefighters could not approach because of the danger of Davidian gunfire and from exploding munitions stored on the grounds.
Jurors heard audio tapes made inside the compound, in which unidentified Branch Davidians were heard asking apparently incriminating questions such as "Start the fire?" and "Should we light the fire?"
Lengthy investigations
The siege sparked years of Congressional inquiries and criminal trials, as well as a probe started last year by a special investigator named by the US Justice Department.
The government argued that Koresh taught his followers he was an incarnation of God and trained them for an armed apocalyptic conflict.
But surviving Davidians testified that Mount Carmel was a peaceful Bible study centre.