The rejection came despite an appeal by the Iraqi leader's son Uday for parliament to accept the UN's demands and followed an unexpected warning from France that spurning the inspections would mean war.
The United States dismissed the vote as "pure theatre", saying Saddam Hussein - not parliament - was the only real power in Iraq.
The Iraqi president has until Friday to make up his mind on the resolution, which demands Iraq submit a detailed list of its arms and allow inspectors complete access to all suspected weapons' sites
The White House said nobody believed the Iraqi parliament had any real influence.
"There is only one voice that matters in Iraq under the regime of Saddam Hussein, and that's Saddam Hussein," said US National Security Council spokesman Sean McCormack.
The BBC's Middle East analyst Roger Hardy says the events in parliament may be designed to enable the Iraqi leader to have it both ways.
If he accepts the resolution, he will at least buy time during which a war could be staved off further.
But parliament's rejection allows him to signal that the resolution is an affront to his dignity, and that if he does accept it is with the greatest reluctance and distaste.
French warning
Saddam Hussein's eldest son Uday had urged parliament, in a written message, to accept the UN resolution "without restrictions because the initiative is not in our hands".
Next steps
Iraq must confirm whether it will "comply fully" with the resolution by Friday
Iraq then has 30 days to reveal all programmes, plants and materials which could be used for weapons production
Inspectors must be allowed to resume checks within 45 days of resolution being passed
Thereafter, inspectors have 60 days to report back to the Security Council but may report violations earlier
His statement came on the heels of a warning about the consequences of a rejection by France, a member of the UN Security Council which has argued in the past that Baghdad should not be automatically attacked if it fails to meet the terms of the resolution.
"If Saddam Hussein does not comply, if he does not satisfy his obligations, there will obviously be a use of force," Foreign Minister Dominique de Villepin said in a radio interview in Paris.
Following the UN Security Council's adoption of the new resolution, "we can now expect that any decision on force would be made unanimously", he added.
It is the strongest indication from France to date that it would support military action, provided it is approved by the Security Council and not a unilateral campaign by the United States.
Iraqi deputies had made clear their hostility to the resolution in a first day of debate on Monday, and the parliament's foreign relations committee recommended that it be rejected.
One MP told the BBC that the resolution was designed to give the US a pretext for making war on his country.
"If you read it - I have - carefully, again, you'll find that any small mistake could happen or any pretext could be raised by any inspector - it will cause the war," Dr Muhammed Muzaffar al-Adhami told the BBC's World Today programme.
"It seems to me as if it is... a cover, legitimate cover to the United States to launch an aggression against Iraq."
The assembly's speaker, Saadun Hammadi, said the document was unacceptable and a violation of Iraq's sovereignty.
Members of the Iraqi parliament are carefully vetted and can only make recommendations - the power to make decisions has always rested with the Iraqi leader and his close aides.