Peers have backed an amendment to the Brexit bill which demands a "meaningful" vote on Theresa May's final deal with the EU.
A total of 366 voted for an amendment to the bill to trigger Article 50, with 268 voting against.
It proposes that the Prime Minister would not be able to finalise a deal with the European Union without the approval of both Houses of Parliament.
Under the amendment, Mrs May would also require the prior approval of MPs and Lords if she decides to conclude talks "without an agreement as to the applicable terms".
It is the second time in a week the Lords have defeated the Brexit bill - on Wednesday a Labour amendment demanding protection for EU citizens in the UK was passed by a majority of 102.
Brexit Secretary David Davis said the outcome of the amendment vote was "disappointing".
He said: "(The bill) has a straightforward purpose - to enact the referendum result and allow the Government to get on with negotiating a new partnership with the EU.
"It is clear that some in the Lords would seek to frustrate that process and it is the Government's intention to ensure that does not happen.
"We will now aim to overturn these amendments in the House of Commons."
Former Lib Dem leader Paddy Ashdown described the second amendment as a chance for the Commons "to think again".
Lord Ashdown told Sky News: "This is about the sovereignty of Parliament, the Prime Minister was trying to get away without Parliament having a say - we've insisted it should.
"What else is democracy about?"
He added: "The Government have abused the people's vote, they have hijacked the Brexit referendum result for the hardest possible Brexit, the one that leaves us the most distant from the European Union."
With the Prime Minister vowing to trigger Article 50 before the end of March, senior peers now expect "ping pong" on Monday, with the Lords amendments being debated - and thrown out - by MPs in the Commons in the afternoon.
The bill would then return to the Lords that evening, when peers are expected to end their demands for changes and allow the legislation to reach the statute book.