The Rev. Robert Nugent, a co-founder of New Ways Ministry, had been suffering from lung cancer when he died Wednesday in Milwaukee at age 76, the group said in a statement.
Nugent and Sister Jeannine Gramick created the ministry in 1977 with a goal of reconciling gays and lesbians with the wider church community.
In 1999, Cardinal Joseph Ratzinger, then the Vatican's orthodoxy watchdog, said they had harmed the church by causing confusion about church teaching that same-sex relationships were sinful. Ratzinger, who went on to become Pope Benedict XVI, ordered the co-founders to permanently stop their outreach.
Nugent told The Associated Press in an interview that year he didn't dissent from the core teachings on homosexuality, but opposed the language the church used when discussing the issue.
"I spent 25 years telling homosexuals that the church cares for you, that it wants you to have a part in it," Nugent said. "How can I talk to them and convince them of that if I use language like evil, depravity and disorder?"
New Ways Ministry, based in Mount Rainier, Md., continued to operate.
Nugent mostly stayed on the sidelines as the Vatican had directed, while Gramick continued to advocate for gay rights, often running afoul of U.S. bishops. New Ways Ministry supported the 2012 Maryland law that recognized same-sex marriage.
Nugent, a member of the Salvatorian religious order, had said he had been deeply pained by the Vatican order, but he complied since disobedience would have cost him his priesthood. Francis DeBernardo, who now leads New Ways Ministry, said Nugent had "exhibited uncommon courage" in his work.
BALTIMORE January 2, 2014 (AP)